There's a lot of talk about student debt forgiveness. (And not the forgiveness of PSLF for public service.) On the campaign trail Biden promised to forgive $10,000 of each student loan debtor, although this promise has seemingly been broken. Currently he's just extending Trump's pause, seemingly waiting for elections to pass. People who are further left even want a one-time forgiveness of all student loan debt.
Student loan debt is a huge issue. Currently public student loan debt totals $1.6 trillion dollars. Roughly 1 in 8 Americans has student loan debt. Starting your career in the red has understandably made a lot of people feel hopeless. However it's worth noting that roughly half of this sum is owed by graduate students, and fewer than 10% of Americans owe over $100,000.
Nevertheless, certain people act like student loan forgiveness is an easy issue to help Americans in need. Yet it's strongly opposed by people without student debt. Those without student debt either didn't go to college and thus likely have lower earning potentials or already paid off their debts and sacrificed in other ways. Is their opposition just born out of jealousy then? Why would student debt forgiveness be bad?
There's smaller issues like what would happen to the next generation of students when universities keep increasing tuitions higher and higher because they know people will keep paying any price with their free government money. But the main reason forgiving student debt would be bad is because then the US government would suddenly be out $1.6 trillion dollars that it was previously counting on. It's options to balance the books would then be to:
- Tax $1.6 trillion dollars from its populace, making those of us without student loan debts directly pay for the loans.
- Print more money, greatly inflating the US dollar yet again, and indirectly making everyone without debt pay for it in the form of higher prices on everything.
Forgiving debt is the same thing as printing more money. It doesn't create any value, it just redistributes it from those without debt to those with the debt. As those with student debt tend to be better off and more able to pay it, forgiving student debt would merely be a regressive tax, taking money from the poor and giving it to rich. With that understanding, it's easy to see how this is an unpalatable decision to those with both economic understandings and consciences.