Forgiving US Student Loan Debt

§ Introduction

There are lots of arguments about the specifics of student loan debt, but the broad interesting question is: should the government significantly aid students loan debtor? The canonical example of this aid being the forgiveness of the debt (most of which is owed to the government).

It would be highly inefficient for the government to significantly aid student loan debtor for the following reasons: (statistical support pending...)

• Major. The vast majority of student loan debtors graduate/d college, and so they are already hugely advantaged in terms of marketable skills they can use to pay back their debt while adding value to the economy. So many people take out student loans precisely because (and they are usually right) they expect going to a school to be worth it in net. The same amount of resources could be used much more efficiently in other areas.
• Major. To some extent forgiving student loans reduces the return value on them, making the issuing of student loans less economically feasible in the future. This hurts the prospects of future students that could take advantage of student loans.
• Major. Ceteris paribus, easier access to student loans allows more inefficiency in people's decisions to take them on, because the cost of the loan to the debtor is being artificially (via non-market forces) reduced. In this way, many more students may take on student loans without the corresponding expectation to pay them off (either in the choice of whether or not to go to school at all, or what to study in school), since they expect to take advantage of the government's financial forgiveness.
• Minor. Forgiving the current debtors is unfair to those who took on student loans and already payed them off. The policy punishes responsible debtors and incentivizes future debtors to be less responsible.
• Minor. There is little principle for the government stand on to prioritize forgiving student loan debt over other kinds of debt to the government, so granting this policy could cascade into forgiving other debts which is fiscally irresponsible.

However, there are also some good reasons to forgive student loan debt: TODO

§ Resources

Statistics

• Student Loan Debt Statistics [educationdata
  https://educationdata.org/student-loan-debt-statistics
  Placeholder description for https://educationdata.org/student-loan-debt-statisticseducationdata]
  • Student Loan Debt in 2003: $0.49 trillion (not 2021-inflation adjusted as $0.33 trillion)
  • Student Loan Debt in 2021: $1.75 trillion

Debates

• Should the forgive student loan debt for all? [kialo
  https://www.kialo.com/should-the-us-forgive-student-loan-debt-for-all-10154
  Placeholder description for https://www.kialo.com/should-the-us-forgive-student-loan-debt-for-all-10154kialo]
• Student Loans Should Be Written Off. [kialo
  https://www.kialo.com/should-the-us-forgive-student-loan-debt-for-all-10154
  Placeholder description for https://www.kialo.com/should-the-us-forgive-student-loan-debt-for-all-10154kialo]

Legislation

• Income-Driven Student Load Forgiveness Act [congress
  https://www.congress.gov/bill/117th-congress/house-bill/2034
  Placeholder description for https://www.congress.gov/bill/117th-congress/house-bill/2034congress]
  • Student depth forgiveness bill becomes law [kalshi
    https://kalshi.com/events/SDEBT/markets/SDEBT-23JAN01
    Placeholder description for https://kalshi.com/events/SDEBT/markets/SDEBT-23JAN01kalshi]

§ References

• educationdata
• kialo
• kialo
• congress
• kalshi

§ Signature

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