The treatment of student debt has become even more urgent since the advent of the COVID crisis. Several stimulus proposals call for the cancellation of all or up to $ 50,000 in student debt, but would such relief help or hurt the economy?
Mark Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget (CRFB) stops by Credit Eco to Go in Clark Hill to discuss his latest article “Cancellation of student loan debt is a weak economic stimulus”. Mark acknowledges that while getting rid of debt can be helpful for debt holders, it is not the appropriate vehicle for stimulating the economy. On the one hand, it doesn’t change people’s cash flow much, and research shows that for every dollar in student loan forgiveness, only 0.23 dollar cents is returned to the economy.
Mark is a proponent of direct economic stimulus and offers some suggested alternatives to help short and long term student loan borrowers.
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Funk Game Loop by Kevin MacLeodLink: https://incompetech.filmmusic.io/song/3787-funk-game-loopLicense: http://creativecommons.org/licenses/by/4.0/