Wyoming economist and former lawmaker disagree on student loan debt forgiveness

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By Ellen Fike, Cowboy State Daily

A Wyoming economist and lawyer disagree on whether writing off the country’s $1.6 trillion student loan debt would be a good thing.

At the end of February, former US Secretary of Education John B. King called on President Joe Biden to forgive student loan debt that weighs on the head of about 42 million.

The average student debt is around $36,000. The federal government issues and owns about 92% of the nation’s student loan debt.

Economist and state Sen. Cale Case, R-Lander, told the Cowboy State Daily earlier this month that if Biden were to write off student loan debt, it could set a troubling example.

“It’s kind of a bad precedent to think you can go to college, borrow a lot of money and expect it to be forgiven,” he said. “From an economic perspective, that would probably lead you to borrow too much and buy too much education, if you expect that to be forgiven.”

Case added that people who go into debt might expect other loans to be forgiven, such as credit cards or mortgage debt.

“It strikes me that people need to make better decisions when it comes to education,” Case said. “It’s very expensive and it’s not for everyone. I think a lot of people underestimate what a college education is going to cost compared to what it’s really worth to them.

Case also asked if Biden had the power to make a decision such as canceling student loan debt.

During the 2020 presidential campaign and early in his presidency, Biden said he would be willing to eliminate at least $10,000 in student debt per borrower. According to The Hill, other prominent lawmakers have called on him to keep that promise and raise the limit to $50,000 per borrower.

Laramie’s attorney and former lawmaker Charles Pelkey ​​told the Cowboy State Daily on Thursday that even canceling some student debt would have a positive impact on the economy.

“Look what happened with the deferral of student loan payments, families were able to buy homes or help with child care costs,” he said. “These are people who were previously paying between 10% and 20% of their monthly income on student loan debt.”

While he understands Case’s concerns about student loan debt forgiveness, Pelkey ​​thinks the idea of ​​limiting forgiveness to just student loans and capping the amount, as proposed, is a good idea. .

Pelkey ​​said he thinks education should be free, but similarly fire departments and public roads are technically free.

“It’s not free, but it’s a cost that we should all bear in society because we benefit from having an educated workforce,” he said.

A moratorium on student loan repayment was instituted under former President Donald Trump’s administration following the coronavirus pandemic and it has been extended several times since Biden took office.

Biden has forgiven some student loan debt, though his actions have largely targeted marginalized populations such as people with disabilities, those working in public service, and people who have been defrauded by their institutions, especially those who enrolled in for-profit colleges.

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