Abstract
Student loans help many individuals obtain higher education that they otherwise could not fund, but concerns have arisen in recent years about the large number of borrowers that appear to be struggling to make their payments. This article considers the economic consequences of excessive student debt. It then turns to policy options for relieving excessive debt burdens—most notably, the debate over student debt forgiveness and ways to change the federal student loan program to limit the number of new borrowers that will struggle to make debt payments.
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Notes
The thought experiment underlying nearly all studies to date of how student loans bear on economic outcomes is how the world might look different if student debt disappeared but the higher education financed by the debt remained. For policy purposes, the results thus speak to the debate over student loan forgiveness rather than the effect of student lending generally, which is almost certainly positive and large on net.
See Dynan (2019) for links to the relevant papers.
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Dynan, K. Rising student loan burdens and what to do about them. Bus Econ 55, 129–133 (2020). https://doi.org/10.1057/s11369-020-00180-6
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DOI: https://doi.org/10.1057/s11369-020-00180-6