Our View: Student Loans: Biden’s Debt Relief Plan Makes Sense | Opinion
There are many relevant numbers when discussing the $1.6 trillion in college student debt owed by 45 million people.
The numbers themselves are staggering. That’s more debt than any other debt Americans hold except mortgage debt.
And there’s a number associated with President Joe Biden’s pledge, “I’m going to make sure everyone in this generation gets $10,000 off their student debt as we try to get out of this horrible pandemic.” he said in a 2020 campaign speech in Miami.
The Biden administration has been torn over politics, with some saying debt relief would go to Harvard Law School graduates and other affluent Americans. Lawyers for the administration believe the executive order may not be legal. The administration requested a legal analysis by the ministry, but it was heavily redacted when it was released.
Canceling $10,000 for student borrowers would cost about $321 billion, according to a study by the Federal Reserve Bank of New York.
Seems like a lot of money until we make some meaningful comparisons. Trump’s 2017 tax cuts cost $1.9 trillion. Sold as a way for companies to access capital to invest in production and create jobs, the tax cuts fell far short because the companies had $2.3 trillion in capital and had no really need the tax cuts. Instead, they increased dividends for their wealthy investors.
Various analyzes show that the tax cuts have never “paid for themselves” and have in fact worsened the federal deficit.
Student loan forgiveness also pales in comparison to economic calamities like the savings and loans crisis that would cost $370 billion in today’s dollars and the 2008 financial bailout that cost $498 billion. ($678 billion in today’s dollars).
There are other good reasons for the modest write-off. Removing $10,000 for each would remove 10 million people from the student loan backlog. The Education Department is working with vendors to process the debt, but two of the eight vendors recently quit, leaving a backlog that is expected to take months.
Proponents of the debt cancellation plan argue that it would erase the roles enough to reform debt treatment, which is a system that has long been criticized.
But at the end of the day, the students and families who have struggled to afford the unfair and sky-high costs of higher education deserve as much, if not more, than the bad actors who caused the financial crises or others who pocketed Uncle Sam’s money in the form of corporate dividends or tax cuts. .
The $10,000 relief is not a tax cut, but it will stimulate the economy when students have a few hundred extra dollars a month and can pay for private goods and services instead of paying the government.
Students, now highly educated workers, are key to our economic success and prosperity. A $10,000 debt relief package is a small investment in America’s future.
We urge the Biden administration and its Democratic and Republican supporters to endorse the student debt relief package.
– Mankato’s free press