President Biden is toying with the idea of student loan forgiveness.
Loan forgiveness is politically popular in some corners. But it is also an action that does nothing to solve the real problem of why student debt is so high to begin with.
“Colleges can set the price, knowing that the government is just going to give their customer, the student, a blank check to pay that price,” said Josh Mitchell of the Wall Street Journal.
“And so, not only is there no incentive under this current system for colleges to control prices, but there’s actually every incentive for them to raise prices.”
Today, About: Beyond loan forgiveness. The role of the federal government in causing and solving the problem of high student debt.
Josh Mitchell, Wall Street Journal reporter, covering the US economy. Author of The Debt Trap. (@JMitchellWSJ)
beth akers, an economist studying higher education and labor markets. Principal Investigator at the Manhattan Institute. Author of Making College Pay: An Economist explains how to make a smart bet on higher education. (@DrBethAkers)
the wall street journal: “The long road to the student debt crisis” — “The American student loan system is broken. How badly?”
Manhattan Institute: ‘Ideas for the New Administration: Higher Education’ — ‘Higher education took center stage in the Democratic presidential primaries, and party congressional leaders are calling for universal student loan forgiveness and at public university without tuition.”