Pro: Forgiving student loans benefits the economy and closes social gaps.

There’s a reason why high school and college students alike search far and wide for any type of scholarship or grant that could fund their college tuition: college is really expensive. 

However, with President Joe Biden in office, college students, current or past, may be looking at relief from their financial burdens. The president aims to forgive $10,000 of debt per borrower through an executive order. As college tuition prices increase each year, public funding decreases, causing students to be left with insurmountable debt. Therefore, student loan debts should be forgiven by the government to alleviate financial burden on millions of Americans, to simulate the economy and to close social gaps.

Relieving $10,000 of student loans would help stimulate the economy, as it would help millions of Americans pay off all, if not most, of their debts. Based on fourth quarter data from the Federal Student Aid, forgiving $10,000 would benefit 75% of borrowers.  And according to a 2018 Levy Economic Institute of Bard College paper, a one-time cancellation of the $1.4 trillion student debt held would translate to an increase of $86 billion to $108 billion a year, on average, to GDP. This is possible because borrowers with fully or largely forgiven debts have more freedom to invest elsewhere, like retirement, starting a business, or even buying a house. Houses, and land, are investments that generate wealth with time, which helps those of low socioeconomic standing create generational wealth. 

Besides freeing money that could stimulate the economy, forgiving $10,000 in student loans will also narrow social gaps. A 2016 Brookings Institute report stated that on average, black students owed $7,400 more than any other race group, and that amount only multiplied. Four years following graduation, black borrowers owe twice as much as white borrowers, and over half the amount is interest. In addition, they are more likely to experience negative financial events after graduation like higher interest rate payments, as well as discrimination in labor markets. This prevents them from accessing wealth-building opportunities that can end generational wealth disparities. Relieving some of their financial burden can finally end the cycle of poverty perpetuating communities of color.

Some may question why only one generation of college students should be forgiven, however they fail to recognize that one generation could be the catalyst for long term change. The executive order can potentially help up to 9.8 million people afford housing, and with it, a family, retirement, and other luxuries that many take for granted. As a member of the Congressional Oversight Commission Bharat Ramamurti said, student loan forgiveness will essentially put about $3,000 back into American pockets each year, all of which can be used towards their community and livelihoods. One generation is necessary for change to be enacted in order to benefit future generations, and by taking that step now, we can start making strives towards a more inclusive and wealthy future.

While this solution does not address the root of the student loan crisis, it would bring relief to millions of Americans. The executive order would help stimulate the economy, which is necessary during these trying times, as well as help narrow social gaps that keep people of color in poverty. Strives made by President Biden and the American government will help bring a generation out of debt. Suddenly, college doesn’t sound so bad.