The idea of forgiving student loan debt is a polarizing idea. A Harvard economics professor wrote about how she changed her mind to support debt forgiveness:
“Contrary to the popular narrative, the huge run-up in defaults has not been driven by $100,000 debts … Rather, they are driven by $8,000 loans at for-profit colleges … the smallest loans, which have the highest default rates, are ripe for forgiveness.”
A National Review correspondent argued the exact opposite: that loan forgiveness disproportionately benefits those who don’t need it. Across the dozens of articles I have read on the topic, almost no one ever mentions the one solution that could actually solve this problem without creating ensuing resentment and backlash among those who don’t benefit from it because they either chose not to borrow for college or already paid back their loans.
What if student loans had zero percent interest?
For many, the cycle of debt never gets better from student loans because they spend years paying back the interest only to fall further into debt. As California congressman Eric Salwell (who himself has taken nearly $100k in student loans and paid more than $28k in interest over the past decade) says, “it does seem to me that the easiest thing we could do is … bring the interest rate to zero.”
This fairer solution could offer people the choice to borrow money to go to college, hold them accountable to pay that money back and offer the loan at zero percent interest to prevent financial opportunists from locking students into predatory loans with interest rates that create lifelong debt. As long as a government-sponsored debt forgiveness program rewards financial institutions for preying on students, this problem is unlikely to get better.