Is Student-loan Forgiveness Unforgivable?
Roughly 45 million Americans currently hold $1.6 trillion in student debt, with the average student-loan receiver owing between $20,000 and $25,000, according to the Federal Reserve. Among those actively making payments on their debt, the average monthly installment is between $200 and $300. And with 5.3 million more people unemployed than in February, right before the U.S. fell into the economic depression caused by pandemic (流行病), some people say that student-debt forgiveness could be beneficial to the economy.
“Student-debt cancellation feels like one of the most accessible executive actions to stimulate the economy at the moment,” says Suzanne Kahn, director of the Education. Kahn says the move would also help close the wealth gap between white Americans and people of color. Some 90% of Black students and 72% of Latino students take out loans for college versus just 66% of white students, according to an analysis from the Consumer Financial Protection Bureau.
But others argue that sweeping student-loan forgiveness doesn’t help the people who need aid most. Americans with college degrees, as a whole, have been less influenced by the economic effects of COVID-19 than their non-college-educated counterparts. Besides, they raise concerns that if the government wipes out current student loans, future college students may have a motivator to take on debts, hoping they will also be forgiven. Colleges may in turn tend to raise their prices further.
What’s clear, according to the both sides of the aisle (过道), is that economic crises worsen the problem of student debt. The last time the U.S. dipped into a recession, state governments cut their investments in colleges and universities—which, in turn, raised their tuition prices and forced students to take on ever larger loans.
In recent weeks, the government has walked a fine line on the issue, offering support for a bill calling for $10,000 worth of student-loan forgiveness but turning down anything close to a plan to issue $50,000 per borrower through executive action.
That’s not sustainable in the long run. It remains to be seen if the government can arrive at a political solution that is.
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