Student Loan Forgiveness Only Works If It’s Targeted, Claims Author

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Student loan forgiveness only works if it’s targeted, new research finds.

Here’s what you need to know.

Student loans

Only targeted student loan forgiveness works – so says a new study from Brookings. Proponents of large-scale student loan forgiveness claim that student loan forgiveness will reduce disparities and minimize the socio-economic wealth gap. However, research suggests that student loan forgiveness is regressive whether measured by income, education, or wealth. Now the author respond objections to the large-scale cancellation of student loans. (The student loan forgiveness could be the reason the Democrats lose the midterm elections). Here are the author’s claims, reader objections, author’s response, and what it means for your student loans.


Student loan forgiveness ignores college is an asset

  • Claim #1: It is unfair to count the cost of student loans (liabilities) without counting the value of the education received (assets). It’s like counting the cost of the mortgage without counting the value of the house.
  • Objection: A homeowner can sell a house for cash. However, you cannot sell student loans.
  • Responnse: “People invest in a college, degree, or trades degree because it helps them earn more, avoid unemployment, and enjoy a better quality of life…”
  • Responnse: “While you can’t sell your degree, that doesn’t make it worthless.”
  • Responnse: “So when it comes to assessing who benefits from student debt forgiveness, the right concept of wealth to use is…the income that assets produce over time. And well-educated borrowers make a lot of income from their degrees.

(Here’s Who Won’t Get Student Loan Forgiveness)


Student loan debt is not linked to the high cost of tuition

  • Claim #2: The increase in student loan debt is not based solely on tuition fees. On the contrary, “many more low-income students and non-traditional students attend college without the same resources as ‘traditional’ students.” (How Federal Student Loans Will Change This Year).
  • Objection: The problem is that college is too expensive. With lower tuition fees, students would borrow less. (7 ways to get a lower student loan repayment).
  • Responnse: “Solving the root problem requires cutting college and graduate costs, increasing aid for low-income students, and improving the quality of undergraduate and graduate programs.”

Free college would be a good policy, wouldn’t it?

  • Claim #3: When it comes to “free college”, it’s not a question of “what can we afford?” It’s a question of, “What do we, as a nation, want to pay for?”
  • Objection: Can’t we afford a free university? Free university benefits all of society.
  • Responnse: “Most of the benefits of post-secondary education are not public benefits to society as a whole, but private benefits to the student in the form of higher income and higher quality of life. (Do you qualify for $5 billion in student loan forgiveness?)
  • Responnse: Free college only covers tuition for undergraduate studies, but excludes all graduate studies (which accounts for about half of all student loan debt).

Student loans: next steps

What are the next steps for your student loans? The debate over student loan forgiveness is not new. President Joe Biden has focused the first year of his administration on substantial student loan relief. In addition to extending student loan relief three times, Biden forgave $15 billion in student loans. Although Biden’s approach has been targeted at canceling student loans, he has nonetheless helped hundreds of thousands of borrowers get critical student loan relief. Proponents of large-scale student loan forgiveness say student loan forgiveness has clear benefits, ranging from economic stimulus to freeing a generation of borrowers from economic ruin. (Are you eligible for $5 billion in student loan forgiveness?) Opponents say large-scale student loan forgiveness would disproportionately benefit the wealthy and not address the underlying problem of high tuition fees , among other arguments. Whatever your stance on student loan forgiveness, it’s important to know that the Biden administration will end temporary student loan forbearance on May 1, 2022. So make sure you have a game plan. in place to fight student loans.

Here are some popular options for student loan repayment:


Student Loans: Related Reading

Here’s who won’t get student loan forgiveness

Are you eligible for $5 billion in student loan forgiveness?

How to Get $1.7 Billion in Student Loan Forgiveness

7 Ways to Get a Lower Student Loan Repayment

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