This past week the Biden administration announced a monumental decision to forgive student loan debt to millions of Americans. The responses to this bill have been mixed with some news organizations comparing the President to Jesus, to others claiming the bill is unfair and has the ability to drive the American economy further into recession. This decision will likely cost around $500 billion dollars when it is all said and done. The following statement from Republican senator: Bill Cassidy sums up what seems to be the Republican response to this decision, “This is spending at least $300 billion we do not have which will make inflation worse”. At a time where the US economy by all measures is struggling the suggestion is that this decision could not have happened at a worse time.
The issue many have is that the majority of US taxpayers never went to college but will now be asked to fork over increased tax dollars to support those who did. According to the Penn-Wharton Budget Model, 87 percent of American adults don’t have student loans at all. This statistic speaks volumes, with 87% of Americans holding no student debt at all that suggests either: the person never went to college or said person has already paid off the loans they took out. Another glaring issue with these decisions is that there is no consideration to those families who worked hard to support their children through college, those families who went without and took on the financial hardship so their child could go loan free. These families receive nothing back, nor do the college grads who worked tirelessly in their early professional lives to pay off the loans they had taken out, these people are also excluded from this decision, not only are they excluded they are now being told that ‘you paid off your loans….. Now it’s time to do the same for others’.
Not to say this decision is all bad, it is a decision that in no-doubt will help millions of Americans. There is however no attempt to even address the root of the problem on hand. The problem here is rising educational costs that are being left unchecked by the government. Giving a short-term handout does nothing to curb these costs and as some are predicting, will lead to the problem worsening.
https://budgetmodel.wharton.upenn.edu/issues/2022/8/23/forgiving-student-loans
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