I’m really not trying to start a debate, I just want to understand why there is a dilemma, and how exactly it would work if passed.
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The US is in an interesting position in that much of the Student loan debt is owned by the Government rather than private banks.
So the Government could forgive a student loan they own by just cancelling it. “you don’t have to pay us back, and we’ll take it off the books”
Technically the Government would lose money equal to the value of the loan, which in turn would be passed down to the taxpayer.
But not really, Government finance is such that forgiving the loans would actually generate more income in the long run.
That person now student debt free could buy a house, a car, raise a family, etc and paying taxes all along the way.
The overall economic benefits would greatly outweigh the downsides.
The problem though is that they haven’t addressed the core problem of Colleges + Universities being too expensive to begin with. So if they start discharging Student loans it will probably become that much more difficult to get one in the first place.
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