Debate Desk
Should Washington Cancel Student Loan Debt for Millions of Borrowers?
Canceling loans shifts the bill to taxpayers who did not borrow, rewards rising tuition, and the Supreme Court ruled against the 2022 plan.
The claim
Supporters say that student debt holds back a generation, delaying home buying, marriage and business starts, and that canceling some or all of it would stimulate the economy and correct for rising tuition, which young people could not control.
The answer in three points
- Debt does not vanish when it is canceled. The loans were paid out of federal funds, and cancellation moves the cost to all taxpayers, including those who never went to college, those who chose a cheaper school, and those who paid their loans off at a sacrifice. A plumber is asked to pay for a lawyer's degree.
- Cancellation does nothing about the cause. Colleges raised prices as federal aid flowed in, and a one-time cancellation without reform invites the next round of borrowing and the next round of price increases. A policy that rewards the institutions that charge the most invites more of the same.
- The legal route was closed. In Biden v. Nebraska (2023), the Supreme Court held that the secretary of education could not use an emergency statute to cancel hundreds of billions of dollars in loans without clear authority from Congress. A policy of this size belongs to the people's representatives.
A policy that lowers the price of college, instead of shifting the bill, would help future students.
The numbers
- The Federal Student Aid office reports that federal student loan debt was about $1.7 trillion in 2024, held by more than 40 million borrowers.
- The Supreme Court decided Biden v. Nebraska in 2023 by a 6-to-3 vote, holding that the HEROES Act did not authorize the secretary's plan.
- The Congressional Budget Office estimated the cost of the 2022 cancellation plan at about $400 billion, according to its 2022 report.
What they will say next
"Tuition is out of control." It is, and the response is to find out why: administrative growth, easy credit, and campus spending. Reforms to accreditation, requiring colleges to share the risk of unpaid loans, and showing the earnings of each program would help.
"Other countries forgive debts." Many do so within programs that are paid for, and some systems link repayment to income. We can create reasonable income-driven plans without a blanket cancellation.
"Borrowers were told college was necessary." Many were, and some programs lead to jobs that do not pay enough to cover the cost. The answer is honest information and alternatives such as apprenticeships.
"The government wrote off other debts." Bailouts were criticized, and two wrongs do not make a right.
A fair system tells students what a degree is worth before they borrow, and makes colleges answer for the results.
"Borrowers were misled by colleges." Some were, and the law already provides relief for fraud. A targeted remedy for those cases differs from a general cancellation.