What are the long-term effects of student loan forgiveness?

What are the long-term effects of student loan forgiveness?

Student loan forgiveness can lead to increased financial freedom, allowing borrowers to invest in homes, businesses, or education.

How does it affect the economy overall?

It can stimulate economic growth by increasing consumer spending and reducing debt burdens, potentially leading to higher GDP.

Are there any negative consequences?

Yes, some argue it could lead to inflation or increased tuition costs as schools may raise prices, anticipating more forgiveness.

What about the impact on credit scores?

Forgiveness can improve credit scores as borrowers reduce their debt-to-income ratio, making them more attractive to lenders.

Is there a risk of moral hazard?

Yes, there's a concern that it may encourage future borrowers to take on more debt, expecting similar forgiveness in the future.