For context, I’m really referring to central banks. What would the consequences be if the central banks just decided to forgive entities that issue student loans, like FAFSA? I’m asking on a global scale and an individual household scale.
Thank you!
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The government can only forgive the loans it owns, unless it wants to spend money buying the loans it seeks to forgive. They do own quite a few though, so they can do that, but that means a dip in federal revenue since that debt was supposed to be an income stream for them. We already spend at a deficit, so either we take on more debt that before, or we increase taxes to compensate. Ultimately, every dollar forgiven will be paid by someone, so should we all pay it, or just those who took the loans? I chose not to take loans, but I’d likely have to help pay those loans anyway if debts are forgiven.
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