Canceling student loans: What’s fair for borrowers, taxpayers?

President Joe Biden’s plan to forgive up to $20,000 in student loan debt for millions of Americans represents an attempt to find middle ground on a huge issue the administration has struggled with ever since assuming office 19 months ago.

The core dilemma, for both Biden officials and the continuing public debate over loan forgiveness, might be summed up with a simple question: What is fair?

Opponents say that in this case, using money from all taxpayers to provide targeted relief to a few individuals, isn’t fair at all. Those individuals incurred their debt freely. What about past generations of students who tightened belts to pay for higher education? And won’t another round of government fiscal stimulus overheat the economy?

There’s some dispute about what the macroeconomic effect of Mr. Biden’s plan might be, says Steven Teles, a political scientist at Johns Hopkins University, who cautions that he’s not an economist. “But it’s hard to see how it’s not inflationary.”

Supporters hold that it’s fair to help borrowers battered by fast-rising college costs, falling public investment in schools, and too-often predatory educational institutions. Targeted loan relief could help ease racial disparities in the economy, they say.

School debt can persist long after borrowers enter the workforce, add supporters of the Biden plan. Relief could help millions improve their lives.

Ellyse Marques, an environmental consultant in Gainesville, Virginia, graduated from college in December 2020. She had $20,000 in student debt, which she’s since paid down to $12,000. Read more »