Ah student debt cancellation. Typically there are two camps to this. Those in favor who say “It’ll help the economy!” and those against who typically play the fairness card. I’m more to the latter, but there’s more to this discussion than just that.
It isn’t about getting people out of debt
The idea of forgiving student debt isn’t about wiping away debt. Never has been. It’s about making room for those borrowers to take on other types of debt. In other words, rather than getting them out of debt, it’s about changing the kind of debt they hold.
This is where the “it’ll help the economy” gambit comes from. They want student debt forgiven to saddle these borrowers with mortgages, car loans, and credit cards. It’s similar to all the investment firms who write articles telling people to hand their money over to them instead of putting any extra money you might have (over savings and an emergency fund) against your mortgage or other debts, including your student loans.
Lost future revenue
This is the other major thing no one is talking about. If the Federal government forgives that debt, that is interest and principal revenue they will no longer be getting. Billions of dollars per year in revenue gone. Think about that.
Oh but they already have a plan to recuperate that lost revenue. Tax people like me a lot more.
It’s about buying votes…
…by making you guilty to vote for anyone BUT Democrats down the line. “If you had a student loan, you now owe us your loyalty.” And if this were to occur, it wouldn’t surprise me if there will be lies spread down the line that Republicans will reinstate the forgiven loans, despite such being impossible. I mean we see it all the time with slavery and Democrats saying that Republicans will or want to bring back slavery, despite such also being impossible.
But since when do propagandists let small details like that get in the way?
There’s a better way
One of the properties of student loans that are oft-cited is the extreme difficulty to discharge them in bankruptcy. I’ve said before we need to make that easier. And if that were to happen, we’d also fast see those loans dry up because lenders are going to be a lot less willing to write loans without some kind of guarantee they’ll get paid back.
At the same time, though, even if they could be discharged in bankruptcy, that doesn’t mean you can just declare bankruptcy and get those loans discharged. You still have to abide by the bankruptcy code, meaning you have to show you are unable to pay back your debts and won’t be able to for the foreseeable future.
Bankruptcy isn’t easy. By design. Because bankruptcy law isn’t about creating an “easy out” for your debts, including your student loans. But a lot of people want that easy out, which is why politicians are willing to capitulate on student loan forgiveness.
Just remember, though: it was never about getting you out of debt, only ever about putting you in a position to take on even more debt, while at the same time saddling you with guilt should you ever decide to vote for someone who isn’t a Democrat.