CANCEL STUDENT DEBT NOW, PERIOD! Yes, I had some student debt. Yes, I paid off this debt, AND under the rules at that time interest did not begin to accrue until I got out of school and then the rate was 3%. As the study below indicates, canceling student debt would be good for our overall economy.
Now our young people have to pay very high rates. If they miss a payment, the fees add up doubling or tripling the amount owed. Yesterday I read a comment from a young person saying they had student debt of $24,000, had paid $18,000, and still owed $24,000. This is absurd.
We should not be turning our young people into debt slaves. CANCEL THE DEBT!
This does not include the loss of many capable students who never enter or leave Post Secondary Education because of the high cost of education, including debt!
The Macroeconomic Effects of Student Debt Cancellation
Among the more ambitious policies that have been proposed to address the problem of escalating student loan debt are various forms of debt cancellation. In this report, Scott Fullwiler, Research Associate Stephanie Kelton, Catherine Ruetschlin, and Marshall Steinbaum examine the likely macroeconomic impacts of a one-time, federally funded cancellation of all outstanding student debt.
The report analyzes households’ mounting reliance on debt on financing higher education, including the distributive implications of student debt and debt cancellation. It describes the financial mechanics required to carry out the removal of debt held by the Department of Education, (which makes up the vast majority of student loans outstanding). As well as privately owned student debt; and uses two macro-econometric models to provide a plausible range for the likely impacts of student debt cancellation on critical economic variables over a 10-year horizon.
The authors find that cancellation would have a meaningful stimulus effect, characterized by greater economic activity as measured by GDP and employment, with only moderate effects on the federal budget deficit, interest rates, and inflation (while state budgets improve). These results suggest that policies like student debt cancellation can be a viable part of a needed reorientation of US higher education policy.
Download: Research Project Report, February 2018, Associated Program(s): Economic Policy for the 21st Century.The State of the US and World Economies
Author(s): Scott FullwilerStephanie A. KeltonCatherine RuetschlinMarshall Steinbaum
