What Should the United States Do About Student Debt?

The outstanding student debt balance in the United States is large – over $ 1.7 trillion – and growing. Some policymakers have suggested that the U.S. government should write off all student debt held by the federal government, while others have advocated forgiveness of a capped amount per borrower. In January, an aide to then-President-elect Joe Biden revealed that Biden planned to ask Congress to write off up to $ 10,000 per borrower and extend the break on loan payments the federal government had. offered to borrowers for most of 2020. regressive (with more benefits going to high incomes) or progressive (with more benefits going to low wages)? And is extending the payment break an effective way to encourage recovery in a pandemic? To investigate these questions, the Chicago Booth Initiative in Global Markets surveyed its panel of American economic experts.

David Autor, MIT
“In addition to my children’s student loans, I would like the government to pay off my mortgage. If the latter idea shocks you, the former should too. “
Answer: totally agree

Eric Maskin, Harvard
“Global loan forgiveness would help those who went to college at the expense of those who didn’t.”
Answer: ok

Emmanuel Saez, University of California, Berkeley
“It depends on how the public debt will be repaid: progressive or regressive taxation, or implicit inflation tax.”
Answer: uncertain

Daron Acemoglu, MIT
“Yes, that would be much better. Student debt is a problem for low- and middle-income households, not for those earning more than $ 100,000 or $ 150,000. “
Answer: ok

Judith Chevalier, Yale
“There is evidence that existing revenue-driven repayment plans are underutilized. Some form of ex post IDR strategy probably makes sense. “
Answer: ok

Jonathan Levin, Stanford
“Maybe, but it seems unlikely if you only provide funds to people who have attended college.”
Answer: uncertain

Steve Kaplan, Chicago booth
“I suspect you might be targeting assistance to those who need it more than the recipient of a typical student loan.”
Answer: Disagree

Larry Samuelson, Yale
“Both would support recovery, but would be more effective if they were targeted to those who need it most, and it’s unclear who would do the best.”
Answer: uncertain

Richard H. Thaler, Chicago booth
“It seems like a weak stimulus. College graduates are already saving a lot. It is the bottom quartile that needs help the most and will spend it. “
Answer: Disagree


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