Student loan debt has become a crushing burden for millions of Americans, holding them back from achieving their dreams and contributing fully to the economy. With the total student loan debt now exceeding $1.7 trillion,1 it’s clear that something needs to be done.
Canceling student loans could be the solution we’ve been looking for. Here are 10 reasons why student loan forgiveness is not only necessary but also beneficial for individuals and society as a whole.
1. Addressing Racial Disparities
Student loan debt disproportionately affects Black and Latinx borrowers, perpetuating the racial wealth gap. Black college graduates owe an average of $25,000 more in student loans than their white counterparts.
This disparity is even more stark for Black women, who hold the highest average student loan debt of any racial or ethnic group.
By relieving the burden of student debt, Black and Latinx borrowers would have more opportunities to build wealth, invest in their communities, and achieve financial stability. This could help narrow the racial wealth gap and create a more equitable society for all.
2. Stimulating the Economy
Student loan forgiveness could provide a much-needed boost to the economy. When borrowers are freed from the burden of student debt, they have more disposable income to spend on goods and services, which can stimulate economic growth.
A study by the Levy Economics Institute found that canceling all student debt would increase GDP by up to $108 billion per year and create over 1 million new jobs.
Moreover, student loan forgiveness could encourage entrepreneurship and small business creation. Many potential entrepreneurs are held back by their student loan payments and are unable to take the financial risk of starting a business.
By eliminating this barrier, we could unleash a wave of innovation and economic growth.
3. Improving Mental Health
The stress and anxiety caused by student loan debt can take a significant toll on borrowers’ mental health. A survey by Student Debt Crisis found that 90% of borrowers experienced significant anxiety due to their student loans, and 1 in 15 borrowers had considered suicide because of their debt.
Canceling student loans could alleviate this mental health crisis and improve the well-being of millions of Americans. Without the constant worry and stress of student loan payments, borrowers would be able to focus on their personal and professional lives, leading to happier and healthier communities.
4. Enabling Homeownership
Student loan debt is a major obstacle to homeownership for many young Americans. A study by the Federal Reserve found that a $1,000 increase in student loan debt lowers the homeownership rate by about 1.5 percentage points for public four-year college-goers during their mid 20s.
By canceling student loans, we could remove this barrier and enable more young people to achieve the dream of homeownership. This would not only benefit individual borrowers but also stimulate the housing market and contribute to overall economic growth.
5. Promoting Education & Skill Development
The high cost of higher education and the fear of taking on student loan debt can deter many individuals from pursuing college or additional training. This not only limits their personal growth and career opportunities but also deprives society of their potential contributions.
Canceling student loans could make higher education more accessible and encourage more people to invest in their skills and knowledge. This would lead to a more educated and skilled workforce, which is essential for driving innovation, productivity, and economic competitiveness in the 21st century.
6. Reducing the Burden on Taxpayers
When borrowers default on their student loans, it’s not just a problem for the individual – it’s a problem for taxpayers as well. Defaulted student loans cost the government billions of dollars each year in lost revenue and collection costs.
By canceling student loans, we could reduce the risk of default and the burden on taxpayers. This would free up resources that could be invested in other areas, such as infrastructure, healthcare, or education.
7. Supporting Families & Communities
Student loan debt doesn’t just affect individual borrowers – it also has ripple effects on their families and communities. When borrowers are struggling to make their student loan payments, they may have less money to support their families or invest in their local economies.
By freeing up more disposable income, borrowers could contribute more to their local economies, support small businesses, and invest in their children’s education and future.
8. Addressing the Rising Cost of Higher Education
The high cost of higher education is a major contributor to the student loan debt crisis. Over the past few decades, the cost of college has skyrocketed, far outpacing inflation and wage growth.
This has made it increasingly difficult for students and families to afford higher education without taking on significant debt.
While canceling student loans would provide relief to current borrowers, it’s also important to address the root cause of the problem: the rising cost of higher education.
By investing in public colleges and universities, expanding grant and scholarship programs, and holding institutions accountable for their costs, we can make higher education more affordable and accessible for all.
9. Recognizing the Value of Education
Education is not just a personal investment – it’s a public good that benefits society as a whole. A more educated population leads to greater innovation, productivity, and civic engagement. It also reduces crime rates, improves health outcomes, and strengthens communities.
Canceling student loans would be a recognition of the value of education and its importance to our collective well-being. It would send a message that we prioritize learning and personal growth, and that we believe everyone should have access to the opportunities that education provides.
10. Fulfilling the Promise of Higher Education
For many Americans, higher education is seen as a pathway to a better life – a chance to gain new skills, pursue their passions, and achieve their dreams. But for too many borrowers, the burden of student loan debt has made that promise feel like a false one.
Canceling student loans would be a way to fulfill the promise of higher education and restore faith in its transformative power. It would give borrowers a fresh start and the opportunity to build the lives they’ve always imagined.
And it would reaffirm our commitment to investing in the potential of every individual, regardless of their background or financial circumstances.
From addressing racial inequalities and stimulating economic growth to promoting mental well-being and honoring the promise of higher education, student loan forgiveness can potentially transform lives and society as a whole.
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Martha A. Lavallie
Martha is a journalist with close to a decade of experience in uncovering and reporting on the most compelling stories of our time. Passionate about staying ahead of the curve, she specializes in shedding light on trending topics and captivating global narratives. Her insightful articles have garnered acclaim, making her a trusted voice in today's dynamic media landscape.
