For the entirety of the Biden-Harris administration, they've touted student loan forgiveness as a way to bring 'relief' to borrowers who can't make student loan payments.
Payments on loans they took out to pay for college and loans they agreed to pay back. But we digress.
The argument was forgiving student loan debt would lift a massive financial burden.
Guess not:
A July University of Chicago study found "that borrowers experiencing student-loan forgiveness largely replaced it with other forms of debt."
— Carol Roth (@caroljsroth) August 19, 2024
- via WSJ
Whoops.
This story is interesting for a couple of reasons. For starters, it kind of belies the notion the economy is great. Credit card debt, for example, is at an all-time high as people struggle to make ends meet under the weight of crushing inflation. Mortgages have skyrocketed and rents keep going up.
Second, many people -- this writer included -- have argued that if the government is going to forgive student loan debt to provide 'economic relief' to consumers, there is no logical limit to what other forms of debt the government can unilaterally decide to forgive. See the aforementioned mortgages and credit cards. What's to stop Biden-Harris -- or any other administration -- from wiping that out?
Nothing.
Here's some details from The Wall Street Journal:
In interviews, the borrowers who have had their loans wiped away say the act has given them more freedom or helped them sleep easier at night. But it hasn’t been a panacea for all of their financial stress.
Borrowers who were late on payments or even defaulted on their student debt are often still digging out of other financial problems, including with their credit scores or other forms of debt. And since many weren’t making regular student-loan payments, they don’t find themselves with a new stream of cash just because the monthly bill stopped coming.
Oh. Weird. People who weren't making payments don't have the money they weren't spending on payments to spend on other things? Shocker!
Who could have possibly predicted that?!
— Monika (@MonikaMusing) August 19, 2024
Insert Gary-Oldman-Screaming-Everyone gif here.
Gee, irresponsible people continue to act irresponsibly.
— HungarianFalcon (@HungarianFalcon) August 19, 2024
Friedman said something about incentivizing things and getting more of it.
That which is rewarded gets repeated.
Without fail.
Well, isn't that wonderful, ... while I'm still paying mine! 😒😖😵💫😵💫🤬 I
— ✨️ JMacTheWeird 💫 (@_8675309_Jenny) August 19, 2024
It's really unfair for the people who are paying their loans or paid for college out of pocket or paid off their loans.
Imagine that. People will people. https://t.co/LkKJYzYGxh
— Dog guy (@Catsorange1) August 19, 2024
People will always people.
Can't fix the poor mindset.
— Sh!t You Should Know (@Sh1tUShouldKno) August 19, 2024
I truly believe that if we redistributed all of the wealth equally, at least 80 percent of the successful folks would be right back at the top in 3/5 years... and the broke would go back to being broke https://t.co/za6oQyE5pj
This would track -- one-third of people who win the lottery often declare bankruptcy within three to five years.
Well my stars and garters this is a shocker https://t.co/ASeTmIXVk9
— Jake Poinier (@DrFreelance) August 19, 2024
There's a turn of phrase we haven't heard in a long time. LOL.
And that, kids, is how we get inflation. https://t.co/YROncfv7WN
— Bex (@BexStreams) August 19, 2024
This is how we get inflation.
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