By: Olivia Visser, Opinions Editor
Last month, US President Joe Biden announced plans to cancel up to $20,000 USD in federal student loan debt per person. This is a monumental decision for roughly 48 million US students holding onto student debt. Despite the fact that student loan cancellation will improve the lives of millions, some question its fairness. Taxpayers who never received student loans worry this might place an extra financial burden on their families by increasing taxes and inflation, while those who already paid theirs off feel cheated. While these are understandable concerns, student debt relief can help everyone.
Student loans are a good incentive to encourage the pursuit of higher education. BC’s latest labour market outlook predicts the next decade will see 1 million new job openings, but 80% of them will require some level of post-secondary education. Although a university degree is so influential in obtaining a well-paying job nowadays, government loans are the only option for many prospective students with limited financial resources.
Canada’s NDP Party has promised student debt forgiveness for a while now, but the country hasn’t seen many significant strides in this direction. In 2021, the Trudeau government announced its decision to suspend interest accumulation on federal student loans until March 2023. This is great, but it’s a temporary solution that overlooks the barriers faced by people seeking higher education who have no option but student loans. Next year, low income graduates will once again have to face the reality of paying off their ever-increasing federal student loan debt.
University degrees contribute positively to employment rates and earnings, but we’re living through a crisis of increasing costs of living alongside stagnant wages. 49% of Canadian students have student debt at the time of graduating. Student debt relief lets people focus on important expenses and saving for their undoubtedly costly futures instead of paying off loans that create further barriers to living comfortably.
Joseph E. Stiglitz, professor at Columbia University and chief economist at the Roosevelt Institute, argues student debt relief would have a minimal impact on inflation at its worst. Debt relief critics believe student loan repayment rates would be significantly lower after forgiveness, but in reality the difference is “negligible.” Most people won’t be paying their loans back at high rates anyways, so forgiving them will have an insignificant economic impact. Stiglitz’s article for The Atlantic also argues “student-loan debt is linked to people delaying significant life events such as getting married and having children.” It complicates “starting a family or a small business, moving, or otherwise building up lives.” This isn’t good for our economy.
Why is our society so preoccupied with what other people have? We should all advocate for student loan forgiveness because it helps the greater good. Student debt relief will allow graduates to focus on moving their lives forward, instead of feeling dragged down by finances. This can help everyone. Besides, people shouldn’t have to face barriers to education in the first place. Student loans relieve some of that, but they also trap vulnerable and low-income graduates into lifetimes of unrecoverable debt. It’s about time Canada takes tangible steps towards student debt relief.