Economic questions
1. Unlike attending U.S. public elementary, middle, and high schools, attending college generally requires paying tuition and fees. Many individuals in the U.S. carry significant student debt into their adult lives. What do presidential candidates Elizabeth Warren and Bernie Sanders propose to do about student loan debt?
2. Based on the article, why might forgiving student loan debt boost the economy? Why might it not boost the economy?
3. The article raises other issues regarding which groups of people might benefit most from student loan forgiveness. Do you think cancelling all student loan debt would be fair? If so, why? If not, why not?
4. The article mentions potential moral hazard problems associated with forgiving student loan debt. What is the moral hazard problem the article discusses? If you thought there was some chance the government might forgive student loan debt in the future, do you think it would affect your (or your fellow students’) willingness to take out student loans now? Why or why not?
Sample Solution
Economic questions
Student loans has ballooned, leading to concerns about widespread default and lower consumer spending. Education debt in the U.S. has eclipsed credit card and auto debt. Today the average college graduate leaves school $30,000 in the red, up from $10,000 in the 1990s, and nearly 1 in 3 student loan borrowers are in delinquency or default. That debt makes it harder for people to buy houses and cars, start business and families, save or invest. Elizabeth Warren, Bernie Sanders and other 2020 Democratic presidential candidates embrace widespread student loan forgiveness as a way to boost the economy. under Warren`s proposal, borrowers with household incomes less than $100,000 would get $50,000 of their student debt forgiven. People who earn between $100,000 and $250,000 would be eligible for forgiveness on a sliding scale – the cancellation amount reduces by $1 for every $3 a person earns over $100,000.
