Opinion: An Ineffective Policy Against Student-Loan Debt

Opinion: An Ineffective Policy Against Student-Loan Debt

Andy Szachta, Cub News Writer

Due to the rising cost of college tuition across America, student-loan debt has been getting much more attention from policymakers. One idea that is being pushed is student loan forgiveness (a policy that would relieve former students from the obligation to repay their loans). Although this may sound like a great idea, it is unnecessary and would actually create numerous problems. 

Even though the issue of student loan debt has been a huge topic in politics, the problem isn’t as big as policymakers make it seem. American households hold a total of $16.5 trillion dollars in total consumer debt. However, only about 10% of this is student-loan debt. Fewer than a quarter of households actually have student-loan debt, and, according to the Federal Reserve, it is most common in households with higher incomes. There is no reason that borrowing money for college should be the criteria for receiving government benefits while other causes of debt go unnoticed.

The idea of relieving or canceling student-loan debt is also extremely unfair to those who have paid off their loans already, those who didn’t attend college, and the taxpayers. There has already been action taken by President Biden that would cancel $10,000 dollars in federal student loan debt if the borrower makes under $125,000 a year. There is talk of even more forgiveness being given, but ultimately, it is the taxpayers that are paying the price for other people. Those who have already paid off their loans by getting a job and spending responsibly are punished for this while others get handouts even if they have higher-paying incomes.

Overall, student-loan forgiveness creates many problems and does not really solve the problem. With these policies in place, universities will be encouraged to continue to increase their tuition, thus causing an even bigger problem for students. Instead, action should be taken to get to the fundamental issue at hand and address the rising tuition costs. If there are no steps taken to make college more affordable, students in the future will again be overwhelmed with debt.