Paying off student loan debt for American college graduates would benefit the wealthy much more than less privileged studentssays a new working paper from the National Bureau of Economic Research. “Blacks and Hispanics would also benefit much less than the balance sheets suggest,” say the authors.
In the paper, titled “The Distributional Effects of Student Loan Forgiveness,” economists Sylvain Catherine and Constantine Yannelis conclude that universal student lending would “benefit the upper decile as much as the lower three deciles combined.”
Not all student loan programs would have the same impact, they note:
There are a number of ways to pay off debt, with important distributional implications. For example, forgiveness can be universal, limited, or targeted to specific borrowers. These debt relief policies can benefit various socio-economic and ethnic groups. In this article, their distribution effects are examined. We find that the benefits of universal debt relief largely flow to high-income borrowers, while relief through the expansion of income-related credit schemes instead benefits middle-income borrowers.
In the US, income-based payment plans and loan forgiveness programs already exist, the authors suggest.
However, total or partial loan waiver regardless of income and loan size would be “very regressive, with the vast majority of the benefits going to high-income individuals,” they conclude.
reasonMike Riggs offers some better ideas for student loan reform here.
FREE THOUGHTS
“It is possible that a person – or at least their views – are both loud and silenced “, suggests Tom Chivers. before UnHerd:
By thinking about the trope “I’m being silenced! I’m crying from the front page of a national newspaper” and why I think it won’t hold up https://t.co/AbP7uCoPAW
– Tom Chivers (@TomChivers) December 8, 2020
FREE MARKETS
Uber does not use self-driving cars. Uber “has sold its self-driving auto division to Aurora Innovation and acquired a stake in the startup as it wants to turn away from developing its own autonomous vehicles and focus on profitability after a year of decimation by the pandemic,” said Uber The street.
FAST HITS
For almost a month they have been telling you lies about the “rigged elections”, “massive electoral fraud” and so on. Now they are outraged that their words could have consequences. https://t.co/kbvBckVmlG
– Jay Caruso (@JayCaruso) December 7, 2020
- Why Thomas Massie is Wrong with the Federal Marijuana Legalization Act.
- On freedom of speech and Section 230, outgoing FCC chairman Ajit Pai says he is “pessimistic about where this is going”.
- LA’s new District Attorney is making some much-needed changes:
The new chief attorney in LA. On his first day. Ends: cash deposit. Improvements in judgment. 3 strokes. Stop prosecuting teenagers as adults. More. And makes all changes for tens of thousands * retrospectively. That means those who are already incarcerated will benefit. A good start. https://t.co/DsS2gjmOSo
– Scott Hechinger (@ScottHech) December 8, 2020
