Two Liberal Arguments Against Loan Forgiveness
Millions of Americans are excited by the prospect of student loan forgiveness. The topic was popular on the campaign trail among Democratic candidates, including Joe Biden. There seems to be growing consensus in the liberal party that student loan forgiveness in some form would benefit the economy. However, there are strong liberal arguments against student loan forgiveness.
Forgiving student loan debt disadvantages the poor. And due to federal loan forbearance during COVID-19, it won’t serve to stimulate the economy this year.
It disadvantages the working poor
Millions of poor Americans forgo college education because they can’t afford tuition. And the poor can be wary of taking on large amounts of debt, as paying it back can seem impossible for someone accustomed to living below the poverty line. Plus, poor students can’t rely on their families to help shoulder the debt burden. Some even need to earn money as early as possible to support their families.
Other poor students postpone their college education until they have money saved or work secured that will allow them to afford night classes. And others draw out the timeline of their education so they can pay cash for it along the way.
While need-based aid helps millions of poor students to access education, it doesn’t adequately reach the bottom of the pyramid. Middle-class families benefit far more from college and graduate education and will also benefit more from student loan forgiveness.
This puts families that are struggling to get by at another disadvantage. They are less likely to be well-educated, and those with the privilege of taking on student loan debt receive yet another leg up through loan forgiveness.
It won’t stimulate the economy
Since early in the pandemic, federal student loans payments have been deferred. Millions of borrowers have been able to put their typical student loan payment toward other needs and expenses in 2020 and 2021.
Student loan forgiveness, then, will not inject more money into the struggling economy; it will maintain the status quo. While student loan forgiveness would benefit middle-income Americans, it would not have immediate benefits for the economy.