Con: Forgiving student loans does not eliminate the larger issues.

During President Joe Biden’s presidential campaign, he voiced his support for the immediate cancellation of $10,000 or more in federal student loans per borrower, an initiative proposed by Senator Elizabeth Warren amidst the coronavirus pandemic. 

Student loan forgiveness is releasing borrowers from having to repay federal student loans to finance post-secondary education as a part of Covid relief funds. President Joe Biden’s campaign platform included ambitious changes for higher education where he plans to provide relief for student loan borrowers. Democrats have proposed different legislation with varying amounts of what should be forgiven, however, student loan forgiveness shouldn’t be the solution to provide relief. 

Eliminating student loans debt doesn’t eliminate the larger problems of the expensive price tag that comes with colleges. According to New York Times national economy writer Patricia Cohen, the problem at hand is that colleges are charging these high prices because several students are willing to pay these costs in order to advance their careers, as employers naturally associate education with qualification. Students continue to pursue getting higher education, putting them into debt that often takes several years to pay off. Even when students take out student loans, they may not be reaping the benefits, as a degree does not guarantee a job. Others may not even be able to finish their degree but already took out loans, putting them in a cycle as they are unable to repay loans without a higher paying job but can’t get a job without a degree. 

Canceling student loans doesn’t stimulate the economy. During the last few months amidst the pandemic, many have called on Biden to forgive student loans in order to stimulate the economy; however according to the Committee of a Responsible Federal Budget, canceling student loans will only increase cash flow by $90 billion per year but cost over $1.5 trillion, putting us either further into debt or increasing taxes among the American people. Canceling student debt doesn’t seem to stimulate the economy as much as other relief programs such as extending unemployment benefits or state and local aid. 

In theory, canceling student loans may seem great by canceling $1.7 trillion among 45 million Americans, however, the plan is poorly targeted as the plan only benefits less than 15% of the American population. Of those who need to repay student loans over 75% of those paying are in the top 40% income bracket. The current plan is to cancel student loans of people who make an income less than $125,000, which Forbes Personal Finance Contributor Zack Friedman claims may be too high of a threshold and inadvertently benefit the wealthy who do not need student loan cancelation. Although an idea proposed to benefit those who are struggling financially due to the Covid-19 pandemic, forgiving student loans will not only not benefit the vast majority of Americans but also help the wealthy become richer. 

Student loans forgiveness is not the solution to solve our economic problems especially during a time of covid. The one-time forgiveness will not benefit the future borrowers and those who have already paid off their debt, and rather put more of the financial burden on Americans.