How possible is it for student debt to be canceled? Like is it plausible for a president to do so and if so how would they do it?
In: Economics
For the federal potion of loans they can just write them off the books. There is a specific law prevents thsibunder normal circumstances so remvoinf that law would be required.
For the rest the paperwork would look like any other loan expungement. Similar to bankruptcy or settlement the bank just writes it off the books.
The issue would be creating a robust mechanism to enforce this. A few relatively simple adjustments to finance law would create an easy process.
If schools couldn’t count on free money like that there would have to be some contraction but an easy fix if Congress plays along.
The federal government could cancel public loans, but it would lose a lot of money. It uses that money for new loans; it would take another big appropriation to keep the lending program going.
Debt is not the biggest problem, but a symptom of excessively high costs of higher education. (Generous lending has contributed to that.) Debt forgiveness by itself would not do much; if you want to relieve poverty there’s better ways to target it. It’s kind of like immigration: who is currently in the U.S. might attract the most attention, but the long-term flow is really where the political problem to be solved.
From what i understand, it would take an act of Congress. The president couldn’t do that on their own.
Latest Answers