Some are surprised that the US government’s stimulus dollars boosted the economy. The fact is that government spending stimulates economic growth that creates jobs, exceeds the deficit and enables the country to better address its social deficits and improve its competitiveness. But that work is not done, even with the Infrastructure Act approved this week.
What has lagged so far, however, is lending that heads of government dangled in front of the country’s 45 million student borrowers.
At a time when the US faces economic competition from all over the world, those best trained to unleash the nation’s intellectual strength in the long term through a storm of entrepreneurship and innovation, often personal debt restricted that they have acquired in order to receive the best possible higher education only emerge in a pandemic. The sooner they drop these restrictions and are let go to achieve what they are capable of, the sooner the nation will benefit from them.
This is why the demands for student loan waivers make so much sense.
U.S. student borrowers owe another $ 1.7 trillion, a sum of national debt that has grown by $ 100 billion annually. Forbes points out that student debt is second only to mortgage debt, and is higher than credit card balances or car loans.
Shortly after taking office, President Biden said he would ask Congress to allocate $ 10,000 per student loan, but the issue lost the limelight amid negotiations on the infrastructure bill and the reconciliation process through which Democrats hope to put more money on social programs to generate without the Republicans needing approval.
Student loan facilities are not included in either of the discussions. Instead of issuing this relief, Senate Majority Leader Chuck Schumer, DN.Y. and Senator Elizabeth Warren, D-Mass., among other things, want Biden to use executive power to award $ 50,000 per student. Biden says he’s not sure he has that authority. He weighs his options.
Meanwhile, those opposing the economic challenges of the resurgent pandemic have brought significant relief through Biden’s recent decision to freeze payments and interest on student loans for an additional three months through January 2022. It’s a big help, but the clock is ticking.
Surely there has to be a number between $ 10,000 and $ 50,000 that our leaders for debtors with modest means can agree on.
There are good arguments for exercising caution when issuing student loans.
After all, forgiving debts doesn’t make them go away. It just puts the burden of government on the future and on the backs of many taxpayers who have not taken out loans and those who have taken out loans but have fulfilled their obligations to repay their loans.
As the Wall Street Journal pointed out in a recent comment, the government swallows $ 100 billion annually in loan defaults and hundreds of billions more in credit reduction programs for low-income borrowers.
Isn’t personal responsibility a value worth promoting, isn’t it? It makes the most sense in the long run to find ways to cut college costs rather than establishing an unsustainable practice of letting borrowers off the hook.
But in today’s extraordinary circumstances, it makes sense to offer one-time relief to those who would weigh on that debt for decades.
Not everyone is born on a third or even first basis and can afford to be enrolled in a billion-dollar foundation to which financial aid flows freely. And while lower-cost community colleges can often provide a worthy alternative and invaluable opportunity to study, they are not for everyone.
In a free market that is competing for the brightest minds and the best facilities to help your child compete in the job market, should we be looking for ways to cut the cost of higher education? Certainly.
But in the meantime, appreciate the benefits to the country’s economy at a time of severe stress, relieving and unleashing our best and brightest to perform and realize their potential.
Trust that all of this education will benefit not just them but society as a whole. We’d pay it forward.