I’m Mary Walden with economist MW, welcoming you to the economic perspective. Today’s program looks at eliminating student debt. Mike, there are several proposals to reduce the burden of college student loans by simply having the federal government wipe out the debt. How would this work, and what are the consequences?
Mike: Summary Answer
- Talking about a large amount: $1.6 trillion in student debt
- If loan is from federal government – presumably would cancel it and government would lose the repayment
- If from private sector, government would have to reimburse
- Either way, higher taxes or more federal borrowing needed
- If latter, irony is that the college generations would bear the cost through taxes or paying more interest on the national debt
- Ultimate solution for future students is twofold
- Get through college fast and frugally
- Work to make college cheaper – a “no frills college” paying for teachers and rented space would cut college costs by two-thirds
- I’m MW
And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.