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What would happen if all student loan debt was eliminated?

What would happen to the American college system if Bernie Sander’s plan of “free college” and “eliminate all student loan debt” came to life?  The United States education system is often compared to the system of our European Allies like Germany and Finland who have free education system. Critics asked “If America is so great, why is our education system mediocre in comparison to our allies?”

The United States, in its sheer size and population of the third biggest in the world (a little over 329M) is incomparable to countries with half its size and smaller class divide.  No other country with the same capacity of people, let alone the size of student borrower debt, has attempted free college.

Programs like The Excelsior Scholarship in New York City exist, but have eligibility requirements as well as specific colleges that accept these students. Furthermore, students are required to live in New York state while they go to school for the entirety of the four years; otherwise, they are forced to pay the amount of years they have already attended the university.

Sanders proposal seemingly comes with no strings attached, until he proposes how he’s going to afford the prospect $2.2 trillion it would cost to remove tuition costs from colleges and universities. 

The main source of funding for his initiative would come from a “Wall street speculation tax” that would target Wall Street firms to bail out student borrowers, much like how the United States government bailed out Wall Street in 2008.

There certainly needs to be a change in the system, comparing student wages to the amount of tuition costs to the amount of debt. The organization Young Invincibles found that, according to the Bureau of Labour Statistics, young people on average are earning $807 a week, yet the cost of attending college has risen by almost $10,000. Simultaneously, colleges on average are spending almost a $1000 less on each student.

Bernie has yet to specify whether this removal of student loan debt will be a one time occurrence, annual, or if student loans will become an antiquated notion of the past.  The idea could be revolutionary and change the face of America forever, much like Roosevelt’s New Deal, or it could collapse the American economy in on itself after dividing the government into party lines

Image credit:

“cancel the debt” by Friends of the Earth International

Source credit:

https://younginvincibles.org/wp-content/uploads/2019/05/Young-Invincibles-10-Year-Fact-Sheet.pdf

https://www.npr.org/2019/07/10/738506646/student-debt-forgiveness-sounds-good-what-might-happen-if-the-government-did-it