Why Most People Don’t Want Student Debt Forgiveness – GOBankingRates | Vette Leader

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Should student loans be given the grace of widespread forgiveness? In a recent GOBankingRates poll on student loan forgiveness, 47% of 9,741 responses answered no. Responses of “yes” to the complete cancellation of student debt (34%) and “yes, but only for federal loans” (15%) only marginally displaced the no share with a total of 49%.

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There are many reasons why the topic of student loan waivers is polarizing public opinion. Here we examine why student debt forgiveness is often difficult to come to terms with, but how debt relief can be good for our economy in the short and long term.

Why aren’t more people in favor of student debt relief?

I am a former student loan borrower. I managed to pay off nearly $56,000 in student loan debt in 2019. The process was difficult. It took a lot of sacrifices, like living with roommates instead of owning one and working multiple jobs.

Nevertheless I did it. I paid off my seven loans. The moment I was out of college debt, certain aspects of my life began to settle down. Aside from logging into my account to download a tax form, I never thought about that debt again.

This is a radical change from when I was in debt. I remember what it was like living on credit. It was all inclusive. The nights were sleepless, the calls from my servicer were non-stop, and my stomach hurt constantly.

I know the reasons people don’t like the concept of student loan forgiveness. Here are some common reasons I hear a lot:

  • I had to pay my loans, so everyone else should too.
  • People are lazy. They just don’t want to do the work of paying off debt.
  • You shouldn’t go to an expensive school or take out a loan if you can’t pay it back.
  • If we forgive student loan debt, what’s next? Where do we draw the line?

I’ve read all the reasons it’s hard to forgive student debt. In turn, I wonder if anyone ever considers the mental and physical toll of this debt. I wonder how many people realize that student debt is no longer debt affecting young graduates, but many generations in the United States who are aging in student debt.

Aging into debt rather than out of debt presents a number of challenges to people, whether you know them personally or not.

It makes it harder to save for retirement, straining already-thin budgets, damaging credit, and widening wealth gaps. The longer you stay in student debt, the longer it takes to get out of it. Many may even believe they will never be debt free and resign themselves to the prospect of a lifelong financial struggle.

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Could student loan forgiveness benefit the economy?

The answer to that question is yes, for both the economy and the borrower.

In a 2022 Fortune article about how paying off student debt would affect the economy, Adam Looney, a nonresident senior fellow at Brookings, said that people who go to college and graduate college often do so in a are in better economic and financial shape. They are better educated and earn more. A student loan borrower, that is, someone who has graduated from college and received a degree in their field, will do well throughout their career because they have worked for higher education.

The economic impact of student loan easements would vary depending on a few factors. Fortune reports that this would depend on the amount of aid provided and the individuals targeted. However, no matter how large the relief, it could have the short-term effect of stimulating the economy.

In the long term, this could lead to improved credit scores, increased home ownership, and the ability to start a business or start a family. Countless Americans could finally experience financial freedom on their own terms — even with a little touch of forgiveness.

At the time of writing, there are still a few weeks left before the August 31 pause in federal student loan repayments is lifted. It’s hard to know if another pause will be announced, or if the United States will ever see widespread student loan debt forgiveness.

While it is critical for borrowers to develop plans for debt repayments or for refinancing or consolidating federal or personal loans, no borrower should ever regret receiving higher education. Even if you are in debt on the other side, this is a degree that you have earned through hard work and perseverance and that no one can take away from you.

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About the author

Heather Taylor is Senior Finance Writer for GOBankingRates. She is also the lead writer and brand mascot enthusiast at PopIcon, Advertising Week’s blog dedicated to brand mascots. It has been published on HelloGiggles, Business Insider, The Story Exchange, Brit + Co, Thrive Global and more.

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