Opinions, Column

Canceling Student Loan Debt is the Right Thing to Do

When thinking about what I wanted to write about for my last political column before I graduate, I had no shortage of options—among the war in Ukraine, the proliferation of efforts to restrict the rights of LGBTQ+ youth, and the rising costs of basic necessities things are looking pretty bleak. With graduation just around the corner, however, there is one policy failure in particular that I am about to become intimately acquainted with: the student loan debt crisis. 

At the time I’m writing, student loan borrowers in the United States collectively owe $1.7 trillion, a figure that has skyrocketed 144 percent in the past 15 years. About 45 million people nationwide are affected by student loan debt. Student loan debt, unlike other debt, is nearly impossible to escape from by declaring bankruptcy (made even more difficult by President Joe Biden’s administration’s penchant for fighting against struggling borrowers in bankruptcy proceedings). The weight of these loans can be crushing and can haunt borrowers for decades. Every year, about a million people default on their student loans, and one in 14 have reported suicidal thoughts directly tied to the inescapable burden of their student debt. 

To 18-year-olds eager to go to college and set themselves up for success, private loan companies and the federal government have an easy sell— students take on an average of $40,000 in student loans with the promise of the opportunity to leverage their degrees, get a good job, and pay it back. Lenders prey on lower- and middle-income teenagers, telling them the best way to cling onto the middle class is to take on more debt. In reality, this could not be farther from the truth. Student loan collection companies like Navient create financial precarity, often providing misleading information to borrowers, deliberately tricking them into extending repayment periods, paying more in interest, and concealing ways that payments can be lowered. The student loan racket is a sinkhole, tanking the credit and financial stability of working-class people who just want to get a college education.     

Biden has the power to unilaterally forgive up to $50,000 of student loan debt for every borrower under a federal loan. Under the Higher Education Act, the president has the power to issue an executive order for student debt cancellation, and this could be done without having to work with Congress, leaving no possibility for the policy being derailed by one conservative Democratic senator. Canceling $50,000 for each borrower across the board would effectively wipe out 80 percent of student loan debt, and would provide much-needed relief.

Forgiving student loan debt would have a massive impact, not only on individuals, but on the economy as a whole. Economists say that canceling student debt would be one of the best ways to prevent a recession without further fueling inflation, since it is unlikely to have an impact on day-to-day spending. Freeing people from crushing debt would ripple positively across the economy as a whole—previously overburdened borrowers would be given some space to breathe, allowing them to buy a home, start a business, have children, and save for retirement. Almost 36 million people would be able to put thousands of extra dollars each year into investing in their own quality of life. Forgiving student debt is a moral imperative. 

Beyond being the right thing to do, canceling student loan debt would deliver Biden a much-needed political victory, especially among the younger voters that Democrats need to turn out for the midterms in November. Recent polls show that young voters are rapidly turning on Biden— 50 percent of people under 30 explicitly disapprove of the Biden administration. In 2020, young people turned out for Biden as a reaction against Trump, and Biden has not done enough to motivate this demographic to support him now that Trump is out of office. Two-thirds of Generation Z and 80 percent of millenials support some form of student loan forgiveness. With the Build Back Better bill stalled for the foreseeable future, rising inflation, and low approval ratings, Biden should be searching for an easy political win—student loan debt forgiveness could provide the boost Democrats need. Opposition to debt cancellation fails to properly weigh the moral and economic benefits that would result. One protest that often comes up is that forgiveness of loans is unfair to people who have already paid, but the fact that people suffered in the past does not seem like a compelling reason to prevent people from suffering in the present and the future. Another common criticism is that blanket forgiveness would extend debt relief to the wealthy. There is substantial evidence that universal programs are better than means-tested programs at improving the material conditions of low-income people. The success of loan forgiveness would be well worth the cost of paying off the debt of the few wealthy people who have it in the first place. For the sake of equity, economic practicality, and political strategy, canceling student loan debt is the clear answer.

April 24, 2022