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Does Student Loan Cancellation Stimulate The Economy?


Does wide-scale student loan forgiveness stimulate the economy or represent one massive wealth transfer, or both?

Here’s what you need to know.

Student loan cancellation stimulates the economy

Sen. Elizabeth Warren (D-MA), a leading advocate for student loan cancellation, says that student loan forgiveness will stimulate the economy. If her legislative plan passes in Congress, 36 million student loan borrowers would get their federal student loans cancelled completely. Democrats in Congress have also proposed to forgive student loans with 4 changes. Supporters, like Warren, say that student loan cancellation will lead to new business formation, increase consumer spending, increase geographic mobility, increase the marriage rate, help people buy more homes, and save for retirement, among other benefits. In this regard, proponents who support…

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