January 18, 2022
By: Freedom to Prosper Team
Has the U.S. economy been ‘ok’ without your student debt payments? That’s what economic professor Marshall Steinbaum argues in a recent Business Insider story. It’s been almost two years since 47 million student loan borrowers had to pay monthly student loan bills.
“Workers have gained the financial flexibility to quit their jobs and pursue other opportunities, marking ‘a real shift in how the economy has worked throughout the living memory of anyone who’s really alive now,” said Steinbaum.
In a 2018 paper from the Levy Economics Institute of Bard College, co-authored by Steinbaum, it found full student debt cancellation could boost gross domestic product (GDP) by an average of $86 billion to $108 billion per year, resulting in lower unemployment rates and about 1.2 million more jobs annually.
“If we cancel student debt, what that really means is the federal government is choosing not to collect payments from debtors on the debt that’s already issued,” Steinbaum said. “Can the federal government afford that reduction in revenue of, say, $100 billion a year or some number like that every year, indefinitely? I think there’s no doubt the answer to that question is yes.”
“Less debt equals more economic freedom for people and more vitality for the country.”
Gwen Carney, a 61-year-old single grandmother with $75,000 in student debt, shared her personal story with Business Insider. The $200 she saved each month allowed her to start up a small custom face mask business, which in turn, helped her afford more food, utility payments, and other basic needs.
Student loan repayments have been extended three times during the pandemic. Meanwhile, the U.S. economy is expected to grow an average of 2.3 percent per year through 2030. Progressive activists and student debt cancellation advocates continue to make the case that student debt cancellation is good for the economy. That argument was reinforced by the 2018 economic study. Cancellation will boost the economy, in fact, and will give more Americans the freedom to prosper.
NAACP President Derrick Johnson wrote in a statement, “If you can afford to pause student loan payments over and over again, you can afford to cancel it.”
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