Should Student Loans Be Canceled?

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1 Sept 2023

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The debate over whether student loans should be canceled is a complex one, with strong arguments on both sides.
Arguments in favor of student loan cancellation

Student loan debt is a major financial burden for many Americans. The average student loan borrower owes over $30,000, and this debt can take decades to pay off.
Student loan debt can prevent borrowers from achieving financial milestones, such as buying a home or starting a business.
Student loan debt can have a negative impact on borrowers' mental and physical health.
Student loan cancellation would boost the economy by freeing up money for borrowers to spend and invest.
Student loan cancellation would help to close the racial wealth gap.

Arguments against student loan cancellation

Student loan cancellation would be unfair to those who have already paid off their loans.
Student loan cancellation would be a costly government program.
Student loan cancellation would encourage colleges to raise tuition prices.
Student loan cancellation would send the wrong message to students, encouraging them to borrow more money than they need.

Ultimately, the decision of whether or not to cancel student loans is a political one. There is no easy answer, and the best solution may vary depending on the specific circumstances.
In the case of the United States, the Supreme Court has ruled against the Biden-Harris Administration's proposed federal student loan forgiveness plan. This means that student loan debt will not be canceled at this time. However, the debate over student loan cancellation is likely to continue, and it is possible that future legislation could make it possible to cancel student loans.
Here are some additional thoughts on the issue of student loan cancellation:

Student loan cancellation would be a one-time solution to a long-term problem. The rising cost of college tuition is the root cause of student loan debt, and unless this problem is addressed, student loan cancellation will only be a temporary fix.
Student loan cancellation should be part of a broader effort to address the racial wealth gap. Black and Hispanic borrowers are more likely to have student loan debt, and they also tend to have lower incomes and less wealth than white borrowers. Student loan cancellation would help to close this gap by giving Black and Hispanic borrowers more financial resources.
Student loan cancellation should be coupled with reforms to the student loan system. These reforms could include making it easier for borrowers to discharge their loans in bankruptcy, capping interest rates, and providing more loan forgiveness programs.

The debate over student loan cancellation is likely to continue for many years to come. There is no easy answer, but it is an important issue that deserves thoughtful consideration.
Some various professional viewpoints on the argument for and against student loan cancellation:
Arguments in favor of student loan cancellation from professional economists

Jason Furman, former chairman of the Council of Economic Advisers: "Student loan forgiveness would be a powerful tool to boost the economy and help millions of Americans get ahead. It would also help to close the racial wealth gap."

Ezra Klein, founder of Vox: "Student loan cancellation is a necessary step to address the growing inequality in America. It would help to ensure that everyone has the opportunity to succeed, regardless of their background."
Elizabeth Warren, senator from Massachusetts: "Student loan cancellation is a moral imperative. It's time to give borrowers a break and help them get ahead."

Arguments against student loan cancellation from professional economists

Larry Summers, former treasury secretary: "Student loan cancellation would be a costly government program that would benefit the wealthy more than the poor. It would also encourage colleges to raise tuition prices."

Douglas Holtz-Eakin, former director of the Congressional Budget Office: "Student loan cancellation would be a step in the wrong direction. It would reward borrowers for making bad decisions and discourage them from repaying their loans."
Art Laffer, economist: "Student loan cancellation would be a disaster. It would send the wrong message to students and make college even more expensive."

Arguments in favor of student loan cancellation from student loan borrowers

"Student loan debt has been a major financial burden for me. It's made it difficult to buy a home, start a business, and save for retirement. I would be so grateful if my student loans were canceled." - Jessica, student loan borrower
"I'm a teacher. I work hard to help my students succeed, but I'm also struggling to repay my student loans. Student loan cancellation would give me the financial freedom to focus on my students and my career." - Sarah, teacher
"I'm a single mother. I'm working two jobs to make ends meet, but I'm still struggling to repay my student loans. Student loan cancellation would help me provide for my family and give me a chance to get ahead." - Maria, single mother

Arguments against student loan cancellation from student loan borrowers

"I worked hard to pay off my student loans. It wasn't easy, but I did it. I don't think it's fair for my tax dollars to go to pay off the loans of others." - John, student loan borrower
"I'm a college graduate with no student loan debt. I think it's unfair that I would have to pay for the student loans of others." - Mary, college graduate
"I'm a student who is still in school. I'm worried that student loan cancellation would encourage colleges to raise tuition prices." - Michael, college student

As you can see, there are strong arguments on both sides of the issue of student loan cancellation. Ultimately, the decision of whether or not to cancel student loans is a political one. There is no easy answer, and the best solution may vary depending on the specific circumstances.