The Pros and Cons of Relieving Student Loan Debt

 

As a student who will be paying on my student loans for the next three or so decades, student loan relief sounds fantastic. I could put the money I am paying now into a savings account or invest more into the stock market. I could be able to work fewer hours and have more time for school. Overall, I would have a more disposable income that I could use in the short term and the long term for investing in my future. This, to anyone who has a lump sum of student debt, sounds like a dream come true. The Biden-Harris Administration fully supports the relief of student loan debt (if you meet certain requirements). Before we celebrate and take one big sigh of relief to finally kiss student loan debt goodbye, we must understand the pros and cons of this potential situation. 

Pros

With the average student debt per person being $40,000, the stress and burden that comes with it make a serious impact on the lives of students and recent graduates. Many students are left choosing between passion and responsibility. Some people’s dream jobs just can not financially cover the bills required to pay back such a large amount of student debt. Students often have to abandon the degree that they went into debt for to choose a profession that offers a larger paycheck. Additionally, students and graduates in debt often have to defer marriage and starting families to when their debts are paid or at least a dent has been made in the balance. Helping relieve some, if not all, student debt allows students and graduates to have the freedom to follow their passions and live their lives making decisions with their hearts, not their wallets. Anxiety and Depression have directly linked to financial stresses that debt causes borrowers. This will result in happier, healthier, and more passionate workers in the workforce. With more of a disposable income, more people will have the ability to spend money on luxuries- this includes shopping at retailers, going out to eat at restaurants, and being able to support small businesses like hair and nail salons. This increase in spending increases overall GDP (Gross Domestic Product) and allows for more jobs to be created. Overall, canceling some, or all, of student debt, will create a happier generation and generations to come by allowing financial freedom from the chains of student debt, while also stimulating the economy while potentially helping smaller or struggling businesses. 

Cons

While helping our friends, family, and acquaintances become happier and healthier through the canceling of student loan debt sounds like a great idea, there is also a downside that is unavoidable and there is a great number of people who are against student debt cancelation. Those who are against this decision argue that there are over 200 million people who do not have student loan debt or have already paid off their loans compared to the 45 million who are in debt. Why would the government bailout people from debt when so many people have worked so hard to avoid debt or paid it off? Additionally, the relief of just 1/4 of student loan debt will cost over 400 billion dollars. Who would pay this? The answer is taxpayers. Those who are against student debt argue that stimulus checks to students, higher unemployment benefits, education funding, and small business loans are better ways to help ensure the success and financial freedom for students and graduates. Lastly, student debt cancellation hurts the poor. Relieving students by canceling debts helps those who are already making more money than the majority, especially graduate students. This could lead to making the rich more wealthy and increasing the divide of the wealth gap.

No matter which side you are on when it comes to supporting or disapproving of student loan debt cancellation, I think we can all agree that the intentions of these potential policies are coming from a good heart, however, the disadvantages of these charitable actions must not be ignored. Personally, knowing that not everyone and not all student debt will be relieved, some student loan forgiveness will be positive for struggling students and for the economy. For families and students who make over a certain amount of money, they should not have student loans forgiven. I think that students coming from poor families, or having to work part-time or full time to survive financially during college should be the only people in the running for student loan forgiveness. The goal of these policies is to help those in need of financial help, not help the rich get richer. 

Cites:

 Google.com. 2021. Redirect Notice. [online] Available at: <https://www.google.com/amp/s/www.ocregister.com/2019/03/25/weighing-the-pros-and-cons-of-student-loan-debt-relief/amp/https://www.google.com/amp/s/www.ocregister.com/2019/03/25/weighing-the-pros-and-cons-of-student-loan-debt-relief/amp/> [Accessed 21 January 2021].

Friedman, Z., 2021. Is Cancelling Student Loans A Good Idea?. [online] Forbes. Available at: <https://www.forbes.com/sites/zackfriedman/2020/12/16/is-cancelling-student-loans-a-good-idea/?sh=1720ffa04cce> [Accessed 21 January 2021].