Phelan Acheson: A student loan jubilee would do wonders for the economy

(Pat Bagley | The Salt Lake Tribune) This Pat Bagley cartoon, titled "Crushing Student Loan Debt," appears in The Salt Lake Tribune on Tuesday, April 23, 2019.

The Federal Reserve recently injected $1.5 trillion into the stock market for a roughly 30-minute bump in the markets. That amount of money would’ve nearly cancelled all student loan debt. The Fed created the money only to watch it burn, to assuage the 1%.

In Utah, there is a student debt burden of 67%. This means that 67 out of every 100 people in Utah have some amount of student debt. Speaking from firsthand experience, student debt is crippling. It affects one’s ability to buy a car or house and squelches their future.

If we go back far enough, say 40 or 50 years, most public universities were either tuition-free or very cheap. The idea to make all public universities, trade schools, HBCUs and community colleges tuition free as proposed by Sen. Bernie Sanders isn’t a radical one. It’s merely a return to what we had before.

Furthermore, a full student debt jubilee (cancellation), would boost the economy by up to $108 billion per year, according to an analysis by the Levy Institute. In 2019, a Hill-HarrisX poll found that 58% of registered voters supported the idea of full student debt cancellation and tuition-free college. Cancelling all the student debt is something that can and should be done, on the metrics alone.

A student-friendly Department of Education could cancel all student debt with the stroke of the secretary of education’s pen. Congress has already given the DoE that level of authority. Sanders is the only candidate in the race, including those who suspended their campaigns, with a plan to have a secretary of education use that authority to wipe out all student debt.

Student debt isn’t a uniquely “young people” issue. In fact, according to analysis done by Freedom to Prosper, 20% of student debt holders are over the age of 50. The issue of student loans is weighing down our economy and people and limiting the amount of economic activity our country would otherwise have.

By cancelling all student loans, the amount of expendable cash in the average household would increase. In addition, debt-to-income ratios would be adjusted. People would be able to put the money into our local economy. In short, people could afford more. Most, if not all, industries would benefit.

Restaurants would see an increase of patrons and wait staff would have more tips, injecting more money into the economy overall. People would be able to afford healthier food choices, and be empowered to spend the money it takes to create gardens or join a community garden. There are far more possibilities that we have been unable to even consider because of the drowning effect of student debt.

According to Gov. Gary Herbert, Utah has the biggest, fastest growing economy in the nation. We could expand on our strong economy by ending the trickle-up of student loan payments and allowing Utah’s citizens to spend that money at home. The nationwide average for monthly student loan payments is $393, according to the federal reserve.

Phelan Acheson

Phelan Acheson, Salt Lake City, is a human rights activist, artist and journalist. His original works can be found at wolfoflightnews.com.