---
pubDate: 2022-04-17
title: Forgiving US Student Loan Debt
tags:
  - academics
  - economics
abstract: |
  Over the last 18 years, student loan debt has increased 28% -- from $0.49
  trillion (not 2021-inflation adjusted as $0.33 trillion) in 2003 to $1.75
  trillion in 2021. And there are increases of similar magnitudes of the number
  of students taking on debt. There have been many popular calls for the
  government help students with this debt, especially since 92.6% of the current
  outstanding student loan debt is borrowed from the federal government.
table_of_contents: true
---

## 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)]
  - 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)]
- Student Loans Should Be Written Off.
  [[kialo](https://www.kialo.com/should-student-loans-be-written-off-12676)]

**Legislation**

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