Student loan cancellation is one of the issues that has been in public discussion in the recent past. Some economists posit that the move is suitable for the economy, while others object to economic stimulus. According to Roll et al. (2021), canceling USD 50,000 student loan will enable borrowers to borrow more and use the money to boost their businesses. Senators Elizabeth Warren and Chuck Schumer have been the most vocal proponents pushing for student debt cancellation to boost the economy. While the arguments for canceling loans have been pegged mainly on economic stimulus, especially after the COVID-19 pandemic, great attention is drawn to the impacts it may have on school funding and its impacts on education.
The call to cancel student debt is influenced by several factors, including the forces related to the economy, mobility, and family livelihoods. According to Roll et al. (2021), people with pending loans are under pressure to repay the loan, making them face difficulty meeting other needs. Roll et al. (2021) reveal that most African Americans with substantial student debts do not attend to various aspects of life due to the burden of the loans. For instance, those who have managed to have families find it challenging to give their children a quality education. According to Roll et al. (2021), mandatory loan repayments make it hard for unemployed individuals to contribute to the development of their communities, including building schools and classroom infrastructure. Roll et al. (2021) further reiterate that most people with low incomes mainly concentrate on addressing their basic needs. This indicates that the enormous stress put on those with pending student loans results in low funding for local community schools, which, due to insufficient money, remain in a poor academic state.
The issue of canceling student loans has been approached comprehensively due to potential impacts on various issues. For example, President Biden has suggested a cut of USD10,000, while others, such as Elizabeth Warren, have called on the federal government to consider a USD 50,000 relief on the debts (Roll et al., 2021). Still, others want total debt forgiveness on the loans to enable the economy to run efficiently. The primary issue currently facing the American people regarding loan cancellation is whether it should be considered from an executive directive or policy formulation (Roll et al., 2021). Another problem is whether the cancellation can affect future education loans and their specific repayments. While no directive has been taken, the impacts of COVID-19 on the economy have called for tough measures to rapidly build the nation’s economic power. Since stimulus packages have been considered to boost lives, it would be crucial to consider loan forgiveness for those burdened by financial debt.
In conclusion, the debates on student loan cancellation go a long way in determining possible outcomes depending on whether the issue takes a policy direction or executive order. The cancellation of the debts is needed when the impacts of COVID-19 have hit hard on different communities, predominantly low-income households. By canceling the loans that burden these people, it will be possible to restructure their finances and add more money in circulation, especially if the sums are invested in businesses. Moreover, canceling loans can make it easier for people to contribute to academic institutions and increase the overall academic standards of their local communities. On the other hand, a policy change should ensure the repayments of loans with interests over a more extended period. Enforcing this should then compel the government to provide jobs to the graduates to ensure knowledge growth and available financial resources to continue improving the nation’s academia.
Roll, S., Jabbari, J., & Grinstein-Weiss, M. (2021). Student debt forgiveness would impact nearly every aspect of people’s lives. Web.