Addressing Federal Student Loan Debt for Students Who Do Not Complete - Implications of a Broad Approach to Discharge Federal Student Loans
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Date
2021-12
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Abstract
Student loan debt continues to be a problem in the United States, especially as more students are taking out loans to attend higher education institutions. One of the most vulnerable groups that suffer from student loan debt are the borrowers who attend college but do not complete it. This proposal offers a broad legislative solution that provides up to $50,000 in federal student loan cancellation for all qualifying borrowers who meet the income requirements, including federal student loan borrowers who did not earn their degree. An evaluation of the proposal’s strengths and weaknesses finds that the high financial costs, low political feasibility, and questionable efficiency outweigh any advantages and immediate financial relief it can provide. A broad-scale legislative approach at the rate of up to $50,000 is rejected and instead presents federal student loan forgiveness at a lower rate as an alternative to further assess.
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student debt, higher education, loan cancellation