Many people have questioned whether canceling all student debt is the answer to the crisis going on right now. Currently in the United States, 44 million people owe $1.53 trillion. This is a crisis that is getting worse and is expected to hit the $2 trillion mark very soon. It’s causing a major problem in the lives of young adults who are struggling to make it.
A new survey conducted by Consumer Finances took a look at who was more impacted by the crisis and it turns out that young adults are being impacted more than anyone realized. Is forcing many millennials to move back home with their parents after they graduate college. This new analysis of the data finds that we overestimated exactly how much money these young adults are making after college.
As you can imagine, people living at home have more spending money than those who are struggling with their debt and living on their own. By living at home, they don’t have to worry about rent and other major bills because their parents are taking care of the finances. But, if they were living on their own, the data would reveal that the younger generation is poor.
Do We Have It All Wrong?
Matt Bruenig is the founder of a progressive think tank called the People Policy Project. Bruenig said in an interview that “the debate raging over whether recent proposals from Senators and Democratic presidential candidates Bernie Sanders and Elizabeth Warren unfairly benefit the well-off are on shaky ground.”
“If we’re going to basically talk about how fair the student-debt forgiveness plans are and your notion of fairness has to do with whether it is distributively equal,” Bruenig said. “You have known what the distribution is and this data source does not allow you to know this distribution very well.”
One of the biggest complaints about offering complete and total student loan forgiveness is that it would benefit many wealthy people. Not everyone going to college is poor or comes from a lower-class background. You have many Ivy League schools full of students with millionaire and billionaire parents who can afford to pay for their kid’s education.
It’s mostly the poorer students who are taking out student loans to afford to get a degree and make life better for themselves. So, the argument that wealthy people would benefit from student loan forgiveness might not have any place in reality. It would mostly impact the lower-class who would then have an easier time finding a job and moving out on their own after they graduate.
So far, most of the Democratic candidates running for office in 2020 have offered their own plans and ideas for offering student forgiveness. Each plan is progressive and effectively helps young adults in this area. President Trump, on the other hand, has done very little to curb this problem.
He has recently signed an executive order making it easier for disabled veterans to get their student debt completely wiped away, but otherwise feels it’s unfair for taxpayers to wipe out a $1.53 trillion debt. He says if you take out student loans, that’s a decision you made and others shouldn’t have to pay for it. We’ll have to wait and see what the future holds for this growing problem.