Student Loans Should Not Be Forgiven | News, Sports, Jobs
President-elect Joe Biden campaigned in part on behalf of the cancellation of hundreds of billions of dollars in student debt, starting with a $ 10,000 write-off for the 43 million Americans with federal loans.
But as a Wall Street Journal article last Tuesday noted, tough choices are looming over the proposal. Meanwhile, many families across the United States believe that because they sacrificed financially in the name of their children’s higher education, others should not now be enjoying the proverbial free education that was not theirs. accessible.
This position is not unreasonable.
Even without this reflection that lurks in the middle of the question of forgiveness, it is true that it is the taxpayers who will have to foot the bill for this generous gesture.
It was taxpayer dollars that generated, or guaranteed, federal student loans in the first place.
Rightly or wrongly, many taxpayers are of the opinion that with Biden’s plan, taxpayers would essentially be “hit” a second time to erase a repayment responsibility that the recipients of the money should feel a strong obligation to repay.
After all, the education made possible by the money in question is ultimately aimed at improving the lives, productivity and financial well-being of beneficiaries.
Indeed, the country benefits from this productivity and skills developed through higher education, but loan recipients usually benefit most from it – for the rest of their lives – and should feel grateful and have a sense of ownership. Debt, obligation and responsibility to have been granted the financial basis to pursue their dreams.
Accepting at least some repayment responsibility can have the effect of reinforcing the appreciation of the opportunities that the loan money has presented to them.
However, there is another important aspect of the problem – which fits in with Biden’s thinking – that should not be ignored.
As the Journal notes, “Many economists say writing off at least some debt would boost the U.S. economy by lowering borrowers’ bills, leaving them with more money to spend on homes and cars, or even creating companies. “
However, opponents express legitimate concern that debt cancellation would disproportionately help high-income households, since, in dollar terms, most student debt is incurred by high-income households.
Data from the Federal Reserve shows that the richest 40% of families by income owe just over half of all student debt.
Thus, the issue of student debt cancellation is much more complex than what many people realize or recognize. Some advocates even offer to forgive most or all of the $ 1.6 trillion in student loan debt. “the low.”
Concerned Americans understand that the nation has many more serious needs than providing handouts to young people who are likely – or should – have the financial capacity to meet their repayment obligation over time.
On January 20, the problem will be in Biden’s lap. His administration will have to decide on the scale or targeting of debt reductions, if in fact it opts for such a course of action.
It is important that he does not botch the problem in unnecessary and damaging ways.
Loan recipients should keep in mind these words of President John F. Kennedy: “Don’t ask what your country can do for you, ask what you can do for your country.”