Fall 2023: Student Loan Forgiveness
Topic: The U.S. federal government should forgive all federal student loan debt.
Please use this research page to learn about the “Student Loan Forgiveness” topic. Many of the videos and articles listed below are a requirement of the class, yet please feel encouraged to use your own research skill to find other interesting sources of information to add to your topic knowledge. Thank you!
BACKGROUND:
What Is Student Debt?
Student debt is the money owed on a loan taken out to pay for educational expenses. Individuals can borrow student debt through the government.
Student Loan Forgiveness
Graduates with federal student loan debt who qualify for special repayment plans, such as income-based repayment, may also qualify for debt forgiveness.
Debt Relief Programs
In August 2022, the Biden administration attempted to cancel up to $20,000 in student loan debt for borrowers with Pell Grants and $10,000 for other borrowers at a cost of $430 billion. On June 30, 2023, the Supreme Court struck down this plan in a 6-3 decision. The justices in the majority found the forgiveness program overstepped the bounds of federal law and usurped the power of Congress to control government spending.4
In response to the decision, the White House unveiled the Saving on a Valuable Education (SAVE) Plan, a new income-driven repayment (IDR) option for borrowers. The SAVE plan reduces monthly payments to 5% of discretionary income for undergraduate borrowers. It also changes the discretionary income formula so that an estimated one million low-income borrowers will have their payments set at $0 per month. Furthermore, unpaid interest is no longer added to student loan balances, ensuring the amount you owe will not grow as long as payments are kept up to date. Another measure under SAVE provides loan forgiveness after 10 years for those with balances of $12,000 or less.5
— Student Debt: What It Means, How It Works, and Forgiveness (Investopedia, September 21, 2023)
Benefits of Student Loan Forgiveness (PRO):
1. Reduce Financial Burden on Borrowers:
Forgiving all federal student loan debt would help reduce the financial burden on borrowers and improve their financial well-being.
2. Stimulate the Economy:
Forgiving all federal student loan debt would stimulate the economy by freeing up money that borrowers could use for other purposes such as buying a house or starting a business.
3. Helping to Reduce Poverty:
Forgiving all federal student loan debt would reduce poverty by freeing up money that borrowers could use for basic necessities such as food and housing.
3. Reduce Racial Inequality:
Forgiving all federal student loan debt would reduce racial inequality since Black and Hispanic borrowers are more likely to have student loan debt than white borrowers.
5. Improve Mental Health:
Forgiving all federal student loan debt would improve mental health by reducing stress and anxiety among borrowers.
Harms of Student Loan Forgiveness (CON):
1. Risk of Moral Hazard:
Forgiving all federal student loan debt could create a moral hazard by encouraging future students to take out more loans than they can afford to repay. Forgiving all federal student loan debt would be unfair to those who have already paid off their loans or who never took out any loans.
2. Severely Costly:
Forgiving all federal student loan debt would be costly for taxpayers since the government would have to pay off the loans.
Note: I read that borrowers pay $70B/year ($20B of that is from the interest).
3. Ineffective at addressing root causes of high tuition costs:
According to an article in Forbes, forgiving all federal student loan debt would not address the root causes of high tuition costs, which include administrative bloat, declining state funding, and lack of competition among colleges and universities.
4. Ineffective at addressing wealth inequality:
According to an article in The Wall Street Journal⁵, forgiving all federal student loan debt would not address income inequality since most of the benefits would go to middle-class and upper-middle-class households.
5. Ineffective at addressing racial inequality in higher education:
According to an article in The Washington Post³, forgiving all federal student loan debt would not address racial inequality in higher education since Black and Hispanic students are more likely to attend underfunded schools with fewer resources than white students.
REQUIRED RESEARCH (VIDEOS & ARTICLES)
Please watch all of the required videos (& take notes) before arriving to the first debate class meeting.
“WeTransfer” link for the videos & articles (expires October 2024): [Videos & Articles (WeTransfer)].
Required Research (Videos):
[Video] The student loans debt crisis, explained (Animated),
Chicago Sun-Times, May 2, 2019 [2 min].
https://www.youtube.com/watch?v=FYKpL7p0t1U
[Video] The Debt Limit: Made Simple,
Heritage Foundation, December 11, 2009 [5 min].
https://www.youtube.com/watch?v=7yJRci2pARk
[Video] All student debt in the US, visualized,
Vox News, Aug 6, 2019 [5 min].
https://www.youtube.com/watch?v=NXHwelwmQPA
[Video] Understanding Biden’s $39 billion student loan forgiveness plan,
Fox News, July 14, 2023 [2 min].
https://www.youtube.com/watch?v=z0sSz9m-yhU
[Video] Biden unveils new student debt forgiveness plan as the deadline for resuming payments kicks in,
PBS Newshour, October 4, 2023 [Video = 7 min].
https://www.pbs.org/newshour/show/biden-unveils-new-student-debt-forgiveness-plan-as-deadline-for-resuming-payments-kicks-in
Note: Please read the article too.
Required Research (Articles):
[Article] Student Loan Debt Forgiveness & Elimination (Top 4 Pros and Cons),
Procon.org, Last Updated: June 30, 2023. [PDF].
https://www.procon.org/headlines/should-student-loan-debt-be-easier-to-discharge-in-bankruptcy-top-3-pros-cons/
[Article] How We All Benefit From Student Debt Relief,
TIME Magazine, February 27, 2023. [PDF].
https://time.com/6258489/student-loan-relief-benefits-supreme-court-decision/
[Article] Biden approved $9 billion in student loan debt relief. Here’s what you need to know,
NBC News, October 5, 2023. [PDF].
https://www.nbcnews.com/politics/politics-news/biden-student-loan-forgiveness-borrowers-repayments-rcna119032
[Article] Biden Unveils New Student Debt Forgiveness Plan as Deadline for Resuming Payments Kicks In,
PBS Newshour, October 4, 2023. [PDF].
https://www.pbs.org/newshour/show/biden-unveils-new-student-debt-forgiveness-plan-as-deadline-for-resuming-payments-kicks-in
OPTIONAL RESEARCH (ARTICLES & VIDEOS)
Please consider watching/reading the following research areas in order to prepare for upcoming events.
Optional Research (Articles & Videos):
[Video] Debate: Forgive Student Debt?,
Open to Debate (Intelligence Squared), March 26, 2021 [73 min].
https://www.youtube.com/watch?v=wuJB9ZohQNI
[P1] Ashley Harrington, Federal Advocacy Director & Senior Counsel, Center for Responsible Lending.
[C1] Nick Gillespie, Editor-at-Large, Reason Magazine.
[P2] Dalié Jiménez, Student Loan Law Initiative Director & Professor, Univ. of California, Irvine School of Law.
[C2] Beth Akers, Resident Scholar, American Enterprise Institute.
[Video] Student Loan Help: Forgiveness and repayment tips for borrowers,
Yahoo! Finance, September 24, 2023 [99 min].
https://www.youtube.com/watch?v=ObL9Q0pTROQ
Optional Research (Articles & Videos):
[Article] Student Debt: What It Means, How It Works, and Forgiveness,
Investopedia, September 21, 2023. [PDF].
https://www.investopedia.com/terms/s/student-debt.asp
[Video] The Student Debt Dilemma,
CBS News, March 25, 2021 [29 min].
https://www.youtube.com/watch?v=alS0XVda8rM
ADDITIONAL RESEARCH (Evidence & Outlines)
We provide students with some sample evidence and/or outlines to help them prepare for any upcoming events. This research can be copied word-for-word, or can be modified to fit the students needs. Copying these and other outlines is proper (it’s not cheating). I hope they are useful for you.