One of the greatest hindrances our nation and our economy currently faces is the massive debt with which we have burdened our young people. Over 44 million Americans currently owe over $1.4 trillion in student loans. To put this into perspective, the total GDP of the United States currently stands at $18.57 trillion. Our young people are forced to put their lives on hold, not buying cars or homes, because of mountains of debt.
Clearly saddling the future of your workforce with a debt equal to 8% of your nation’s GDP is going to have destructive consequences for that country’s economy, not to mention the personal pain experienced by those who owe that debt. According to recent report from the Sanders Institute, a program of student debt elimination for this $1.4 trillion would boost GDP growth by $86-$108 billion per year, meaning the program would pay for itself within a decade. This program will also dramatically boost job growth in the U.S.: at its peak, our economy will add 1.2-1.5 million jobs per year.
Arkansas would benefit tremendously from this program. According to Experian, one of the largest credit reporting agencies in the nation, Arkansas stands out as one of the top five states with the highest percentage of student loan balances that are more than 3 months past due, with the average Arkansas student loan borrower owing $31,217. For those who are currently repaying them, these loans represent obstacles to to buying homes, starting businesses, and building the wealth that every American is promised the opportunity to create. If this debt was eliminated, these young people would see these obstacles disappear.
We should not look at this debt cancellation plan as “forgiveness”; students who take on loans simply to receive the education they need today have done nothing wrong, and therefore have nothing to forgive. If we want to build a more just and equitable education system, we must not simply make higher education debt-free moving forward, but rectify the economic injustice that has trapped 44 million former students under a debt that will take decades to repay. As a nation we have to ask ourselves: do we consider the big banks more worthy of a bailout than our country’s future workforce?
Eliminating this debt will stimulate the economy and free millions of young adults from decades of lost opportunities.