There’s a looming student debt cliff awaiting us in 2021. With America in the teeth of the Covid-19–enabled economic downturn, lawmakers suspended federal student loan payments for 80 percent of federal student loan borrowers. This measure, which President Donald Trump extended a few weeks ago, is set to expire on New Year’s Eve, which means borrowers will ring in the new year by restarting their student loan payments in one of the worst job markets in a decade. If Trump truly wanted to give relief to the 43 million people with federal student loans, he could cancel student debt, using the
Another segment of the nation facing severe student loan distress is Black young adults hold
It is often the case that whenever the prospect of student debt cancellation is raised, detractors come out of the woodwork to fret about the so-called “cost.” This misguided complaint ignores several crucial differences between federal student debt and most other kinds of indebtedness. One key difference is that the government holds the vast majority of student loan debt in a portfolio managed by the Department of Education, which often turns a profit. Moreover, much of this debt is essentially uncollectible: It’s owed by people that likely will never be able to repay much of it. Despite this, the federal government spends taxpayer dollars hiring debt collectors to attempt to get blood from a stone; seizing the tax refunds of defaulters is one way they go about this task. What the “cost” argument failed to contemplate, however, is what is the cost of not cancelling student loan debt?
Young adults are already feeling the pinch of the pandemic, with
Recent graduates who have the bad luck of a pandemic coinciding with the start of their career, communities of color, and older Americans struggling with student debt would all find meaningful relief in student debt cancellation. Recent