It is widely reported that President Biden has forgiven a bunch of student loans, and postponed until after the November election the repayment of the rest. This is bad public policy, especially when our best economic minds are concerned about inflation followed by recession.
It is also bad public policy because it creates a moral hazard. That is, it encourages students to borrow money with the now-realistic hope that no repayment will be necessary.
Forgiven student debt doesn't go away, the lenders aren't going to "eat" the loses, the government assumes the forgiven debt. "Assuming the debt" means either the deficit grows or your taxes rise. Instead of the people upon whom the money was spent repaying it, you get to pay for it or to pay interest on the money borrowed to pay for it.
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A Personal Note - the student debt I incurred was to fund my doctorate, and I paid it off over several years. I'm going to resent paying other people's education loans.
Believe it or not, when the other DrC and I were undergraduates in California, the public higher ed fees were so low my far-from-affluent parents could afford them. I remember reading about parents back East worrying about saving for their kids' college costs and being puzzled.
As I recollect, my parents would write a check for $1500 each semester and that would pay my fees, buy my books, and pay for my lodging and food. So it cost my parents about $3000 per year to fund my baccalaureate. I worked summers to fund my car.
Given inflation their $3000 would equal $30,000 today. They only paid for 2 years as I did my lower division studies at a public community college and lived at home. Its fees were trivial and books weren't too pricy either.
