Student loan forgiveness has become a topic of conversation lately. Elected officials in Washington, D.C. (and in all 50 states, for that matter) have been racking their brains trying to figure out ways of getting the economy back on track and cultivating job growth. The unemployment rate remains high, and consumer confidence has plunged recently. Meanwhile, Americans are still in debt as much as ever.
In other words, the situation still looks pretty bleak for many people.
But one Congressman has come up with what he says is a perfect solution to our current malaise: forgive the the nearly $850 billion in outstanding student loan debt held by American college students past and present.
The Congressman is Rep. Hansen Clarke (D-MI), and the bill is H. Res. 365. It’s getting some serious backing from various groups that are circulating an online petition urging Congress to pass H. Res 365 — with about 230,000 signatures collected so far. The petition states that:
Forgiving the student loan debt of all Americans will have an immediate stimulative effect on our economy. With the stroke of the President’s pen, millions of Americans would suddenly have hundreds, or in some cases, thousands of extra dollars in their pockets each and every month with which to spend on ailing sectors of the economy.
Of course, such a plan would add another $850 billion to the nation’s total debt, which is already an unwieldy $14 trillion. Would the boost to our economy and the benefit of freeing so many recent college graduates from the shackles of debt be worth the cost? That’s hard to say.
It’s certainly true that putting more spending money in people’s hands can stimulate the economy — and usually the impact tends to be greater than just the initial monetary amount. But over the long term, large amounts of debt can hurt the economy, as we saw when the government’s credit rating was recently downgraded.
This article is part of our Student Loan Debt Resource Center. If you’re looking for additional information about student loans, be sure to pay a visit!
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