If Student Loans Might Be Forgiven, Why Not Borrow More?

in economics •  5 years ago  (edited)

In 2011, economist Justin Wolfers called student debt forgiveness the "Worst. Idea. Ever." in a Freakonomics post. Why? First, there's the distributional effect.

Source: If Student Loans Might Be Forgiven, Why Not Borrow More? - Foundation for Economic Education

This article explains a number of ways in which student loan forgiveness would be a terrible idea. The fact that it would amount to a regressive tax and encourage more borrowing are at the top of the list.

While there is no doubt that a college education is a great investment for some people, that doesn't mean that student loan forgiveness is a great investment for the average taxpayer. Particularly those that did not go to college or did not borrow money to do so.


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