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Democrats Are Pushing For Student Loan Forgiveness. Could It Happen? How Would It Work?

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About 42 million Americans owe a total of more than $1.7 trillion in student debt, and there is mounting political pressure and controversy about whether to relieve federal student debt to stimulate the COVID-ravaged U.S. economy.

On the campaign trail, President-elect Biden proposed $10,000 of forgiveness in exchange for public service, but has not committed to using executive authority to cancel student debt. Some U.S. House members have proposed he do for up to $50,000 per borrower.

A moratorium on student loan payments and interest is currently in effect through Jan. 31.

What systemic flaws led to the current debt crisis? How have existing laws and policies exacerbated borrower burdens? How does student debt contribute to racial and gender wealth gaps?

How much does the average American college-goer borrow? How many eventually default on those loans?

What loan reforms and relief plans have been proposed so far, and what are the pros and cons? How can debts just be "cancelled"?

What are the potential economic implications of partial or complete loan forgiveness? What would it mean for the future of higher education?

Guests:

  • Seth Frotman, head of the nonprofit Student Borrower Protection Center; former assistant director and student loan ombudsman for the Consumer Financial Protection Bureau
  • Sarah Sattelmeyer, project director for Student Borrower Success at The Pew Charitable Trusts
  • Danielle Douglas-Gabriel, reporter covering the economics of education for The Washington Post
  • Sandy Baum, nonresident senior fellow for the Center on Education Data and Policy at the Urban Institute and professor emerita of economics at Skidmore College

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*This interview was recorded on Tuesday, December 22.