The American economy would see serious benefits from a national effort to eliminate student debt, asserts Scotty Hendricks of The Big Think. The fact that so many young people need to save to repay credit prevents them from spending money that could stimulate the economy. Taking away this burden would result in more people being able to afford homes, completing college and starting businesses. Not only would this give millions of Americans more financial stability, it would also benefit the overall economy. This can be achieved with bigger marginal tax rates that would mostly affect the country’s wealthiest, while benefiting the majority.
The notion that forgiving student loan debt would automatically stimulate economic growth is wrong, believes Abigail Hall Blanco of Inside Sources. Simply giving consumers more money to spend would do little for the economy. Additionally, a student loan forgiveness program would only help those who have already gone to college, not those still planning to do so. In fact, they might see their college tuition rise as a larger demand results in prices going up. Colleges would no longer work to keep costs down as they would be reimbursed by the state. Similarly, all students would happily apply to expensive colleges while taxpayers foot the bill.