Who Gains Most From Canceling Student Loans?
How much the U.S. economy would be helped by forgiving college debt is a matter for debate.
Should helping college students be an economic priority?
Photographer: Timothy A. Clary/AFP via Getty Images
A tantalizing possibility has been dangled in front of millions of Americans who took on crippling debt to acquire a college education: What if that financial burden was lifted? The Democratic Party endorses the idea of the government forgiving at least a portion of the nation's $1.6 trillion in student loans, but opponents in both political parties see it as the wrong move for the economy. Bloomberg Opinion columnists Noah Smith and Michael Strain, both of whom have written about the proposal, recently got together online to debate.
Noah Smith: With the Senate likely to remain in Republican hands, some are calling on President-elect Joe Biden to cancel student loans as a way of stimulating the Covid-stricken economy. In a recent column, I argued that this would not make an effective stimulus, since the type of people who have loans are not likely to spend more if their debt is canceled.