Why Forgiving Student Loans Is A Bad Idea

I’m sure you have heard that many of the most liberal Democrats are in favor of forgiving all or part of the record $1.6 trillion in outstanding student loans. The average student loan debt is about $35,000 according to the Congressional Budget Office.

You may have read that President-elect Joe Biden wants to forgive 10% of all student debt across the board; Senate Minority Leader Chuck Schumer wants to forgive 50%, and Senator Bernie Sanders and others want to forgive 100%.

I’ll tell you why this is a universally bad idea below, but let’s get a couple of things straight right upfront. First, the word “forgive” is not applicable in this case. In order to cancel student loans, the federal government would have to borrow this money to repay the banks, financial institutions, and even the government itself, which made these loans to students.

What that means, in reality, is taxpayers will foot the bill for any student loan forgiveness.

The second thing to point out right up front is the fact that most Americans, especially low-income people, don’t have any student debt because most didn’t go to college in the first place. According to the National Center For Education Statistics, only about 35% of high school graduates complete four years of college.

So how is it fair to those with no college debt to forgive college loans for those who willingly took out these loans? It’s not! And how about those of us who dutifully repaid our college loans in full? I had to work my way through college, in addition to taking out student loans, which I fully repaid. These are questions the liberal politicians rarely ask.

This is a bad idea, period. First, almost half (47%) of all outstanding student debt is owed by graduate students who are pursuing advanced degrees, largely in fields that pay very well – think medicine, attorneys, engineers, etc. These students should easily be able to repay their loans.

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