The Biden administration has been considering a plan to cancel at least $10,000 of federal student-loan debt. President Biden promised something of the sort during the 2020 presidential campaign. And with about 45 million current and former students carrying $1.76 trillion in debt, some sort of debt forgiveness is appealing both as policy and as politics.
But what kind of debt forgiveness, and how much for whom?
What makes that a hard question is that there is not one student debt problem; there are dozens. They range from mega-loans for Harvard Business School degrees that yield Wall Street jobs with mega-salaries to much smaller amounts borrowed to pay for vocational training that proved almost worthless, if not an outright scam.
Some advocates of student loan forgiveness argue that the overall economy would also get a boost by enabling debtors to become bigger consumers.
Most economists say the overall impact of reducing student debt would be modest, but others say forgiveness would enable the beneficiaries to move forward with their lives instead of being dragged down by burdens that — in many cases — are all but impossible to bear.
What’s the plan being considered?
Since COVID-19 descended on the U.S. in March 2020, the White House, first under President Trump and then Biden, has put on hold the repayment requirement and…
