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Mon Nov 25, 2019, 07:15 AM

 

Economists Say Forgiving Student Debt Would Boost Economy [View all]


Presidential hopefuls Elizabeth Warren and Bernie Sanders want to tear up your student loans and set you financially free. That's popular among voters especially those struggling to pay off this debt. Other Democratic candidates have more modest plans. But economists say the dramatic proposals from Sanders and Warren to free millions of Americans from the burden of student debt could boost the economy in significant ways and help combat income inequality.

... "In the short term, it would be very positive for the housing market," says Lawrence Yun, the National Association of Realtors chief economist. He says his group's surveys show that student debt has people delaying home ownership by 5 to 7 years.

He's not endorsing any particular plan, but he estimates that broad loan forgiveness would push up the number of home sales quite a bit. "Home sales could be say 300,000 higher annually if people were not saddled with large student debt." Yun says that would be, "a boost to the housing sector as well as the economy.

The effects would go beyond the housing market. William Foster is a vice president with Moody's, which just did a report on student debt forgiveness. "There've been some estimates that U.S. real GDP could be boosted on average by $86 billion to $108 billion per year," which is "quite a bit" he says. "That's if you had total total loan forgiveness." Foster says it wouldn't have to be total forgiveness to see significant results. And he says it could also help address rising income inequality.

"Student loans are now contributing to what's perceived as lower economic prospects for younger Americans," Foster says. After all millions of people are delaying home-ownership. And that's the most powerful way for most working and middle class people to build wealth. "A typical homeowner has net worth about $230,000, while a typical renter has only $5,000," Yun says...

https://news.wgcu.org/post/economists-say-forgiving-student-debt-would-boost-economy
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Reply Economists Say Forgiving Student Debt Would Boost Economy [View all]
BeyondGeography Nov 2019 OP
BeckyDem Nov 2019 #1
customerserviceguy Nov 2019 #2
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customerserviceguy Nov 2019 #8
redqueen Nov 2019 #6
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