The Fallacy of Forgiveness

If the feds wipe out student debt, who will benefit most?

Illustration: college student with a letterman jacket that reads "I OWE U"During the 2020 presidential primaries, Democratic candidates proposed forgiving $640 billion in outstanding federal student-loan debt. Proponents of loan forgiveness argue that this debt places overwhelming burdens on today’s young graduates—and college dropouts—and that lightening their load would help both the borrowers and the economy overall. Yet these proposals have raised questions about who would benefit most and whether student-debt relief is efficient. Is loan forgiveness for all a good idea?

Beth Akers is a senior fellow at the Manhattan Institute for Policy Research, a center-right think tank. Sandy Baum is a nonresident senior fellow for the Center on Education Data and Policy at the Urban Institute, which leans toward the center-left. In this forum, both authors argue against universal loan forgiveness.

This article appeared in the Winter 2021 issue of Education Next. Suggested citation format:

Baum, S., and Akers, B. (2021). The Fallacy of Forgiveness: If the Feds wipe out student debt, who will benefit the most? Education Next, 21(1), 80-85.

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