Who Really Benefits From Student-Loan Forgiveness?

In March 2020, the government stopped bugging me—and 40 million other Americans—for student-loan payments. It also stopped collecting interest on outstanding debt. And with so many other things to worry about, I largely stopped thinking about that debt. Some survey data indicate that many of my peers became similarly disengaged. Two years later, one estimate from the Committee for a Responsible Federal Budget suggests that $5,500 per borrower has been effectively canceled, largely because of the lack of interest that would have otherwise accrued on the outstanding debt.

So no one has to make payments. And inflation, which has risen sharply, is eroding everyone’s debt burden. But in the weeks following the 2020 presidential election, a coalition of 239 left-leaning groups called on then-President-elect Joe Biden to proceed with debt cancellation on “Day One of your administration.” These groups weren’t the only ones putting the issue on the agenda; Senator Elizabeth Warren, Senator Chuck Schumer, and several other prominent Democratic joined the #CancelStudentDebt chorus. Google-search data show that queries for spiked multiple times during the pandemic, and that interest has remained above pre-pandemic trends. , Biden indicated in a meeting with the Congressional Hispanic Caucus that he is looking into widespread debt forgiveness.