There is a lot to think about when canceling student loans totaling $1.4 trillion. Fairness is a problem. Student loans are being held unpaid by students more than ever.
According to The Hill, dentistry is the most forgiving for loans per borrower. A borrower in medicine would forgive $174,000 of debt. Law borrowers would get an average of $119,000 forgiveness.
Sandy Baum: “We’re now talking about also paying off the [student] debt for people who can afford it. And the people with the biggest debt are people who went to grad school: doctors and lawyers and so on.” (via @cassandrecoyer1) https://t.co/6xTPGYES2d
— Urban Institute (@urbaninstitute) April 29, 2022
There is no moral risk in student loan forgiveness. However, it could cause higher inflation.
Maya MacGuineas is president of The Committee for a Responsible Federal Budget (CRFB). Her belief is that debt cancellation is a popular view but not a good strategy.
Fox Business News: MacGuineas stated that the plan was too expensive, inflationary, and poorly targeted.
She stated, “Even partial bankruptcy is expensive, regressive, and inflationary.” “It would cost as much to forgive $10,000 each person’s outstanding debt as universal pre-K and full extension of expanded ACA subsidies”. “Trump can either be serious about reducing the deficit or keeping inflation under control”.
Senator Elizabeth Warren is a far-left radical who views student loan debt as an easy target. She is playing a dangerous game in the economy.
Do Democrats worry about the inflationary consequences of canceling student loans worth hundreds of millions of dollars more than they are worth?
Heritage Action spokesperson Noah Weinrich (the campaign-side sister organization to conservative think tank Heritage Foundation) stated to Fox News Digital, that canceling student loans would “raise inflation up to 20%.”
He stated, “Make no mistake. It is a handout for wealthy, educated voters. This will come at the price of higher prices for food and gas for working for American families”.
Brian Riedl was less optimistic about the inflationary consequences of canceling the debt. However, this does not make it a bad strategy.
He said that student loan forgiveness would cause problems because it would transfer the obligations to taxpayers (raising taxes and eventually increasing deficits), as well as disproportionately benefit lawyers, doctors with higher incomes, and other professionals.
That’s all. Without major reforms to student loan programs, we won’t be returning in 20 years.
The crisis is being blamed by leftist radicals including Senator Warren’s kids.