Is tax money used? Is anyone profiting from the program? Do colleges lose money? Please don’t make this political. I’d genuinely like to understand without all the talking point bullshit.
In: Economics
Almost all student loan debt in the United States is owned by the Department of Education. The federal government can simply say “forget it” and the debt is forgiven. For the small minority of debt owned by private institutions, the government can’t do anything (outside of some narrow circumstances).
>Is tax money used?
In the sense that all of the government’s money is “tax money,” maybe. The government would lose a financial asset, but it would not need to be replaced with a corresponding tax increase. It would just increase the national debt.
>Is anyone profiting from the program?
Yes, anyone who has their loans forgiven would be profiting because they no longer need to pay that money back.
>Do colleges lose money?
No, the colleges were already paid when the loans were first taken.
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