Affirmative Contention

Contention 1: Student loan forgiveness boosts economic growth.

Student debt crushes the economy. There is over 1.7 trillion dollars of debt held by Americans
which has numerous spillover effects to the broader economy. As a 2018 report from the Levy
Institute notes:

“There is mounting evidence that the escalation of student debt in the United States is
an impediment to both household financial stability and aggregate consumption and
investment. The increasing demand for college credentials coupled with rising costs of
attendance have led more students than ever before to take on student loans, with
higher average balances. This debt burden reduces household disposable income and
consumption and investment opportunities, with spillover effects across the economy.
At the same time, the social benefits of investment in higher education—including
human capital accumulation, social mobility, and the greater tax revenues and social
contributions that flow from a highly productive population—remain central to the
economic advantages enjoyed by the United States.”1

As a result, student debt cancellation would function as a powerful form of economic stimulus
that would unleash a new wave of economic activity. Asha Banerjee, an economic analyst at the
Economic Policy Institute, writes in 2021 that:

“Cancelling student loan debt could also have a powerful stimulus effect on the
economy, which will be crucial as we look to build a sustainable economic recovery.
Research has shown that cancellation would boost GDP by billions of dollars and add up
to 1.5 million new jobs, reducing the unemployment rate. Workers who are Black, Latinx,
immigrants, women, and those in industries paying low wages are still facing a terrible
economic situation with high levels of unemployment. Cancellation will help borrowers
and the lagging economy, as well.”2

Thus, student debt forgiveness would not just benefit individuals with debt, but the entire
economy.

1
Scott Fullwiler, Stephanie Kelton, Catherine Ruetschlin, and Marshall Steinbaum, "The Macroeconomic Effects of
Student Debt Cancellation," The Levy Economics Institute of Bard College, February 2018,
https://www.levyinstitute.org/pubs/rpr_2_6.pdf
2
Asha Banerjee, "Ten Reasons to Cancel Student Loan Debt," The Center for Law and Social Policy, January 2021,
https://files.eric.ed.gov/fulltext/ED610484.pdf