'Eradicating student debt will have an immense and lasting stimulative effect on the U.S. economy.' Columnist hiltzikm explains:
One oft-heard critique is that canceling existing debt would be unfair to families that valiantly paid off their college loans, often making real sacrifices, and now have to sit by and watch deadbeats receive a windfall.
Another objection with at least a superficial logic is that a program to cancel student debt will necessarily be regressive, benefiting the wealthy more than the working class. The Bard survey adds that the picture of the typical borrower has changed dramatically in recent decades. Borrowers were once “traditional students,” the survey notes — those attending private universities and professional schools without a break after high school, “often with a family history of higher educations and with the family wealth to accompany it.”
“Minority borrowers,” Bard says, “take on more debt and have more trouble paying it off.” For them, borrowing for college tends to widen racial disparities in the credit and job markets, producing lower family wealth. The student debt crisis, in other words, is both an artifact of and contributor to wealth inequality in America. What’s worse, a high student debt burden makes those borrowers much more vulnerable to the effects of an economic downturn.
Sanders would eliminate all existing debt for everyone. He would cap the interest rate on future undergraduate loans at 1.88%.
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