Jeff Spross — Why canceling student debt could be good for everyone

It's difficult to project precisely what the overall economic impact of this would be. Student debt is distributed all up and down the income ladder, and people at different income levels will spend or save the freed up money in varying proportions — it's the spending that will juice job growth and economic activity. But a Levy Institute paper from early 2018 — written by economists Scott Fullwiler, Stephanie Kelton, Catherine Ruetschlin, and Marshall Steinbaum — took a crack at figuring it out.

The Week
Why canceling student debt could be good for everyone

Jeff Spross

Richard Eskow — Picture the United States Without Student Debt

A new report from Bard College’s Levy Economics Institute concludes that this bold idea – cancelling all outstanding student debt – would help the entire economy and create more than a million jobs.

To those who say we can’t afford to cancel this debt, the report poses a new and different question: Can we afford not to?

Cancel and Grow

Using widely-accepted economic tools, the report’s authors – Scott Fullwiler, Stephanie Kelton, Catherine Ruetschlin, and Marshall Steinbaum – found that cancelling all student debt this country would create between 1.2 and 1.5 million new jobs. It would also increase the nation’s GDP by $86 billion to $108 billion per year over the next ten years....

Common Dreams
Picture the United States Without Student Debt

Richard Eskow

Ben Schiller — Want To Stimulate The Economy? Cut Student Debt–Not Taxes

The recently passed Republican tax cut package will cost about $1.4 trillion over a decade, according to independent figures. It’s a very expensive policy that currently is not offset by an increase in government revenue, or by spending cuts.

Another measure would cost about the same amount and it too would be hard to justify as a deficit-busting policy. But it might have greater economic benefits, say economists. That policy would be canceling all student debt.

The contention comes from a paper from the Levy Economics Institute at Bard College, which models the macroeconomic impact of relieving 44 million Americans of what they owe for college. About 90% of the $1.4 trillion is held by the federal government. The rest is in the form of private loans.

This policy would be more macro-economically stimulative because of who the beneficiary is,” says Marshall Steinbaum, research director at the left-leaning Roosevelt Institute, and one of the authors of the report. “The tax cuts will go to higher income households that have a lower propensity to spend the money. We show that reducing the burden of student debt on households enables them to spend more.”...

Fast Company
Want To Stimulate The Economy? Cut Student Debt–Not Taxes
Ben Schiller

Ryan Cooper — The case for erasing every last penny of student debt

Student loan debt is a crushing problem in America. Over 44 million people have such loans, with an average balance of about $30,000 — making for a total debt pile of $1.4 trillion. Unsurprisingly, people often struggle to repay these debts with their entry-level wages after graduating. Student debt is now the most common form of troubled debt, with about 11 percent of them 90 days or more delinquent. Worse still, thanks to Republicans and neoliberal Democrats alike, they are almost impossible to discharge in bankruptcy.
We should try the most obvious solution: Congress should cancel all the debt and have the government pay back the lenders.

Perhaps that sounds radical and unworkable. But a new Levy Institute research paper by Scott Fullwiler, Stephanie Kelton, Catherine Ruetschlin, and Marshall Steinbaum demonstrates that it would be easily affordable and have powerfully positive side effects....

The Week
The case for erasing every last penny of student debt
Ryan Cooper