The Problem with the Student Loan Debt Discussion

in #economics3 years ago

Elizabeth Warren and Robert Menendez, Democratic Senators from Massachusetts and New Jersey paved the way for $50,000 student loan debt forgiveness, but the fight must not stop there.


Senate Majority Leader Chuck Schumer and Elizabeth Warren have been on a crusade since President Biden entered the office to cut the grizzly student loan debt in the United States by about half its current number. This is a big deal, since the country is bogged down with nearly two trillion dollars of student debt, and making loan payments has saddled most of the United States’ youthful population with a crippling burden that not only ruins hopes for health, safety, and a happy family but also innately damages the economic ecosystem of the entire country. If $50,000 is forgiven for every borrower, that will forever change millions of lives for the better.

However, there are some catches.

First off is the issue of what loans will be forgiven. This plan will only cancel Federal loans, not private loans, which will leave millions of students still saddled with massive debts. Because of the predatory nature of the United States education system, most poor students have no choice but to accept private loans, and many end up going to private education institutions.

It’s not simply “unfair” that these students (again, many of whom are poor) will be saddled with massive loans that need to be paid off, it’s detrimental to the whole country. Debts like this corrupt the ability of whole generational lines in getting back on their feet and securing a good life, and it’s one of the many economic reasons why minority communities, like black Americans, have struggled so hard with wealth disparity.


Another major problem is that most students have way more than $50,000 of debt. Having debt reduced will help, but most students have around $100,000 of debt after acquiring a Master’s degree or higher, and those who go into specialist career paths like medicine can be looking at loans that are even larger still. Why are we saddling the best and brightest, the youngest among us, the future generations of leaders, with harmful debt?

The truth is that there is no good answer to that question. It seems that there is some bizarre consensus from a conservative side about why this matters, but the truth is that economic arguments against total debt forgiveness are all bunk.

The floor, not the ceiling


We have to look at the $50,000 of student debt cancellation as the floor, not the ceiling, of what we need to achieve. President Biden has hemmed and hawed at going above $10,000 of debt cancellation, but he’s at least open enough to the idea to call for special legal investigations to ensure that he could go ahead with it. This is great, but it’s absolutely the bare minimum of what we need to do in order to stabilize our country.

All public and private debts must be canceled for the good of our current and future generations, and any arguments that suggest otherwise need to be recognized for the corp-backed lunacy that they are.


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