Following Donald Trump's State of the Union, the stock market suffered one of its worst trading days. While people were already unsure of what Trump's America would entail, the Dow plunging by 1,175 points only added uncertainty to the heart of America.
Moreover, what does this mean for the economy with 44 million Americans feeling the pressure? This questioning has lead researchers to study how we can lower unemployment and grow the economy.
The answer? Cancel all student debt.
In a report conducted by the Levy Economics Institute of Bard College, research supports that "cancellation would have a meaningful stimulus effect, characterized by greater economic activity as measured by GDP and employment, with only moderate effects on the federal budget deficit, interest rates and inflation."
The report suggests that the effects would ripple from young people struggling to pay off massive college loans to the economy as a whole. Canceling all student debt would lead to an increase in U.S. GDP between $861 billion and $1,083 billion over 10 years. It would also lead to an increase of 1.18 to 1.55 million new jobs over the same period — that’s about 50 to 70 percent more jobs per year compared to an average of recent years.
"These results suggest that policies like student debt cancellation can be a viable part of a needed reorientation of U.S. higher education policy," the report adds.
This would be a massively supported concept with Americans having student loan debt worth $1.3 trillion dollars in 2017.
“The idea of canceling student debt is not just some crazy idea out of left field, but is actually something that could be done, and done in a way that has a moderately positive economic impact,” Marshall Steinbaum, a fellow and research director at the Roosevelt Institute and a coauthor of the report said in an interview, according to Mic.
Furthermore, the report shows that total loan forgiveness would cost the U.S. government approximately $1.4 trillion over 10 years, almost the same as what the Congressional Budget Office recently projected the new Republican tax bill would cost. This begs the question that if lawmakers are willing to spend to provide massive tax cuts for the wealthy and corporations, can it not also afford to spend the same amount to cancel student debt and help grow the economy?
Such policies are unlikely under Trump's administration. However, lawmakers should definitely flag the policy for future reference. The positive impacts of canceling student debt would be more widely felt for Americans than the tax bill.
