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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There’s a cost to giving credit and student loans are not profitable. They are given out as a favour. Many people get angry at that statement but it is true. Personally I understand the negative feelings towards student loans but i blame the fact that you have to pay for education (unlike in Europe where it’s free or like 1000 dollars per year). If student loans are to be forgiven then banks won’t issue more student loans ever again. They were already loosing money to finance students so now there is definitely no motive to do anything. It will help students but it will prohibit future students from accessing opportunities. Not to mention that students have to pay tax on any amount of the loan forgiven.
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