Forgive all student loan debt? A former US Secretary of Education explains why it will help the economy

Former US Secretary of Education John King has a bold proposal to accelerate the nation’s economic recovery from the coronavirus pandemic and putting millions of people on a better path to financial security: Forgiving all of the $1.7 trillion Americans still owe on their student loans.

King, who served under President Barack Obama, told CBS News that the federal government paid about 80% of the cost of college for students through its Pell Grant program in the 1980s. The government in recent decades to cut its investment in higher education has left many students deep in debt, and the current Pell program covers less than a third of annual tuition for grant recipients.

“We need to make up for that policy mistake of the last 40 years by addressing the crushing burden of student debt that so many young people feel today and fix the problem in the future by committing to a debt-free college in America.” said the king.

More than 43 million Americans (nearly 13% of the US population) have student debt, according to the St. Louis Federal Reserve. The average borrower owes about $37,000.

That anvil of debt often weighs down borrowers for years, forcing them to postpone plans to buy a home, start a business or even have children, King said. Other prominent lawmakers, including Senators Elizabeth Warren and Chuck Schumer, have also urged the government to cancel student loans.

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