Should the Federal Government Forgive Student Loans for Some or All?
By Carlon Howard, Chief Impact Officer, Equity Institute, and Jack Harkin, Law Student at Notre Dame Law School
Student Loan Forgiveness is a Path to Economic Equity
By Carlon Howard – Chief Impact Officer, Equity Institute
Student loan forgiveness is among the most contentious issues in our discourse today. In the United States, nearly 44 million borrowers collectively owe approximately $1.8 trillion in student loan debt. The devastating financial impact of these loans extends beyond the students themselves, affecting their families, communities, and the economy. As the weight of student debt restricts the financial futures of countless graduates, a vigorous debate rages about the feasibility and fairness of wiping the slate clean. Yet, buried beneath the statistics and ideological battles lies a fundamental truth: student loan forgiveness is more than a fiscal policy; it is a direct path to improving social cohesion, reducing political conflict, and disrupting cycles of poverty.
Influencing Social Cohesion and Reducing Political Conflict
Student loan forgiveness extends beyond individual relief. In a nation where political polarization seems to have reached operatic levels, blanket forgiveness presents a rare platform for bipartisan action. It is a tangible act of unity, grounded not in the doctrinal divisions of left or right but in a shared commitment to rectifying a glaring inequity. By alleviating the financial anxiety that stifles the dreams of so many, we foster a sense of inclusion and shared destiny, enhancing the social fabric that underpins our nation’s strength.
In the theater of economic anxiety, student loan forgiveness emerges as a radical yet reconciliatory gesture. It undertakes the essential work of diminishing the animosities fueled by economic disparity. When citizens from all walks of life, political persuasions, and socioeconomic strata benefit from a shared policy, the sharp edge of political conflict is dulled, replaced with a unity of purpose and a consolidation of societal vision. The economic earthquakes of the past decades have ruptured the fault lines of inequality, leaving chasms of opportunity that dwarf the aspirations of younger generations. Since student loan debt compounds these disparities, disproportionately affecting minoritized communities, forgiveness acknowledges the historical hurdles that have impeded the advancement of historically marginalized groups.
A National Imperative
Opponents of student loan forgiveness cite the astronomical costs and a moral hazard dilemma, asserting that forgiveness may incentivize future generations to accumulate debt recklessly. Additionally, people who’ve paid off their student loans may see forgiveness as devaluing their efforts. These are valid concerns that must be addressed with nuance and foresight. As with any policy, the devil lies in the details and the execution.
Funding this initiative requires creative solutions—whether through progressive taxation, restructuring debt, or leveraging public-private partnerships. It is also essential to ensure that the framework for loan forgiveness encourages responsible borrowing and does not repeat the errors that fueled the crisis in the first place. As a transformative policy with far-reaching benefits, forgiving student loans is not just a duty but a national imperative. It is time to shed the collective weight of student loan debt, not as an act of charity, but as a commitment to building a stronger, fairer, and more prosperous country.
Student Loan Forgiveness is a Handout to the Academic Elites
By Jack Harkin – Law Student, Notre Dame Law School
Mr. Howard has one thing right: student loan forgiveness is certainly radical. This policy would forgive over $1.75 trillion dollars, immediately adding to our national debt of $34 trillion and counting. At a time when our government should be making a concerted effort to reduce the debt, student loan forgiveness would fly right in the face of such efforts. While student loans are a burden on borrowers, borrowers knew that when they took the loan out and knew that they had an obligation to pay it back. If we are to start relieving people of their financial obligations, what is next?
While I share Howard’s goal of reducing political conflict in our polarized world, student loan forgiveness certainly would not achieve our goal. This is because the policy disproportionately benefits the rich and well-educated, which is likely to lead to strife along socioeconomic lines. Households with graduate degrees owed nearly 60% of all student loan debt. Those who choose to invest in themselves and pursue master’s degrees, juris doctorates, medical degrees, or PHDs do so knowing that their financial outcomes will likely be better. Those with a high school degree earn less than $40,000, while those with a bachelor’s degree earn around $80,000, and those with graduate degrees earn nearly $100,000 to $150,000 on average. Why should the veteran, waitress, and truck driver be forced to bail out the doctor, lawyer, or businessperson? A policy like this would lead to such a result, and no amount of taxing the rich could change that.
Justice or Charity?
Many argue the effort to forgive student loans is geared toward ending economic inequality. If this is the case, forgiveness of student loans is just a band-aid solution. It is such because it is not an investment in future generations. Student loan forgiveness is like replacing the bucket full of water under the leaky faucet rather than fixing the faucet. The investment in future generations could look like universal school choice programs that would improve educational opportunities and outcomes across the board, which in turn would level the playing field when it comes to career outcomes down the line. Other forms of investment could be expanding trade schools or apprenticeship programs that offer alternatives to a four-year college degree.
In my Catholic faith, our social teaching emphasizes justice over charity. Justice is a long-term sustainable solution, while charity is a short-term answer, oftentimes to a long-term problem. Student loan forgiveness is not justice. Educational opportunity for all from K-12 is justice. Our students deserve better.
Equitable Approaches to Student Loan Forgiveness: Finding the Balance
By Carlon Howard – Chief Impact Officer, Equity Institute
Mr. Harkin brings to light valid concerns about large-scale student loan forgiveness. He discusses the potential increase in national debt and worries about amplifying socio-economic disparities. While acknowledging the validity of these concerns, it’s essential to remember the complex reality many borrowers face and to explore a middle path that seeks fairness and justice without unintended consequences.
Pivoting the Fiscal Debate
Mr. Harkin correctly asserts that wiping out the significant student debt load would affect the national debt. This is a factor we must consciously address. However, it’s essential to take a broader view of the potential upturn that could erupt from a more educated population free from overwhelming debt. Research suggests initial economic stresses would be addressed by improved consumer spending and job performance in the long run, thus having a positive financial effect. What if we design a more equitable policy considering individual circumstances and needs over an all-encompassing forgiveness scheme? A refined policy could help level the socio-economic playing field by targeting those who carry a disproportionate weight of student debt, predominantly Black and Latinx borrowers.
While Mr. Harkin emphasizes the original intentions of loan agreements, we must acknowledge the drastically changed landscape of student loans due to the evolving job market and escalating educational costs. Navigating this financial paradox is a unique challenge for modern borrowers. A tailored policy response must account for these changes, offering solutions in line with the current economic context. While Mr. Harkin rightly advocates for improved K-12 educational access, this should co-exist with other measures, such as loan forgiveness, to alleviate immediate monetary hardships. We should consider debt relief as a part of a holistic approach that aligns with and supports Mr. Harkin’s educational reforms, thus creating a stronger foundation for our present and future workforce.
Striking a Sustainable Compromise
The answer to the student debt crisis lies in embracing the issue’s complexities. Deploying a combination of measures including targeted debt relief, loan structure reforms, and increased educational funding, will address the roots of economic and educational inequality. A policy that respectfully considers the broader socio-economic impacts and the personal burden of student debt is possible. By engaging in open dialogue and careful policy creation, we can aim for educational policies that are economically sound and socially equitable.
Rethinking Higher Education Financing
By Jack Harkin – Law Student, Notre Dame Law School
I thank Mr. Howard for his insightful contributions on this topic. Mr. Howard and I certainly agree that student loans are only one piece of the bigger educational puzzle. He is also undeniably right that education costs have risen rapidly, and college is not as affordable for my generation as it was for prior generations. Our first response to that new reality should be to determine why.
One reason for the skyrocketing cost is society’s attitude towards college education. In many parts of the U.S., especially metropolitan areas and suburbs, college has been identified as a necessity. Economics 101 tells us that when a good or service becomes a necessity, we, as consumers, are less responsive to changes in price. Certainly, this has been proven true when it comes to college. College tuition has dramatically outpaced inflation over the last forty years. Meanwhile, consumers have not responded to that change in price by rejecting the high-priced tuition.
Many posit that one of the main reasons tuition has risen is the increase in allowed borrowing. We must look closely at college and university financial statements to see what are the cost drivers. We need to demand greater financial transparency from these institutions. Mr. Howard and I both share the goal of making colleges and universities more affordable. To make this a reality, we must put pressure on universities to lower costs.
Holding Universities Accountable
Mr. Howard wishes to reform the structure of the loans. One way this can be done is by requiring colleges and universities to back their students’ loans. By doing this, we would put the onus on these institutions to ensure that their students benefit from their degrees. Colleges and universities would likely eliminate degree programs that do not generate successful careers. This would especially be the case if colleges and universities were required to share return on investment statistics with prospective students. Then, students would have the knowledge they need to make an informed decision. Students would likely choose fields that have a greater return on investment.
In line with putting pressure on universities, the Biden Administration is working on a “gainful employment” rule that would punish schools that are not providing an education that financially benefits their students in the long term. While the devil is in the details, the general idea is one that draws broad bipartisan support.
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Carlon Howard
Carlon is the Chief Impact Officer and Co-Founder of Equity Institute. In his role, he oversees organizational strategy, internal operations, and implementation of Equity Institute’s educator pathway program. Carlon is an avid reader and lifelong learner who spends much of his time exploring topics related to social science, history, and leadership.
Jack Harkin
Law Student at Notre Dame Law School
Jack Harkin is a law student at Notre Dame Law School. He has experience in public accounting in tax and consulting roles. He graduated from St. John’s University with a degree in accounting. His work has been published by the Wall Street Journal, and he has appeared on CNN multiple times.
