The Real Cost of Student Loan Forgiveness

: Armstrong Williams on May 8, 2025

Each spring, as tassels are turned and degrees are conferred, college graduates across the country celebrate the culmination of years of study, sacrifice and -- inevitably for many -- debt. Against this backdrop, the idea of student loan forgiveness is touted by many as a compassionate and progressive policy, a generous gift to the newest members of the workforce. But such a policy, while emotionally appealing, is fraught with economic, moral and social consequences that far outweigh its supposed benefits.

Let us begin with a simple question: If student loan forgiveness is justified because it eases the financial burden of borrowers, then why should we stop there? Why not forgive mortgages, car loans or credit card debt? After all, those are also crushing financial obligations for millions of Americans. Yet the notion of broadly canceling those types of debt is rarely entertained because we inherently understand that debt is a contract -- a commitment freely entered into with the understanding of future repayment. To selectively absolve one group while ignoring others introduces a troubling inequity.

Student debt in particular is unique in that it is incurred voluntarily, often with full awareness of the repayment terms. And for many, these loans were used not only for tuition but to subsidize lifestyles that included luxury apartments, spring break trips and the latest consumer electronics. The narrative of the penniless student barely scraping by doesn't always hold up to scrutiny. We are, in effect, being asked to forgive loans that funded both education and a comfortable standard of living, which many Americans -- especially those who chose not to attend college -- never had the opportunity to enjoy.

Mass student loan forgiveness does nothing to solve the root problem: the unsustainable and ever-rising cost of higher education. In fact, by signaling to future borrowers that debt may eventually be canceled, we create a perverse incentive structure. Students will feel emboldened to borrow more, assuming the government will ultimately intervene again. This, in turn, removes the financial pressure from colleges to keep tuition prices in check. Institutions will be empowered to charge even more for degrees of diminishing practical value, confident that the burden will fall not on the consumer but on the taxpayer.

In this way, student loan forgiveness serves as a hidden subsidy to the higher education industry -- particularly elite institutions that already sit atop enormous endowments. It sends the message that there is no meaningful consequence for irresponsible fiscal behavior, neither by borrowers nor by the universities themselves. The result is not just inflation in tuition prices but a proliferation of low-value degrees with minimal return on investment in the job market.

Then there is the deeper economic and class dynamic at play. Contrary to popular belief, student loan holders are often more affluent than their non-college-attending peers. According to data from the Brookings Institution, individuals with student debt tend to come from more privileged backgrounds and are more likely to earn higher incomes over the course of their lifetimes. This makes blanket debt cancellation regressive -- it redistributes wealth upward, benefiting the relatively well-off at the expense of the working class.

Under former President Joe Biden's evolving loan forgiveness his administration proposed, we risked creating an inequitable system in which those who never went to college -- plumbers, truck drivers and service workers -- are asked to subsidize the education of those who did. These Americans, who often come from poorer households, would be footing the bill for graduates with degrees they never had the chance to earn. That is not progress; it is a slap in the face to fairness and common sense.

Debt forgiveness may sound noble, but real reform demands courage. If we truly wish to address the student debt crisis, we must start by reigning in university costs, holding institutions accountable for the value of their degrees, and promoting alternatives to the four-year college path. Trade schools, apprenticeships and community colleges offer viable routes to economic mobility without the baggage of six-figure debt.

America must resist the urge to apply a temporary bandage to a festering wound. Compassion is not the same as coddling, and fairness requires more than virtue signaling. Responsibility must be met with reward, not resentment -- and that begins with treating debt as the solemn promise it is.

========

Armstrong Williams is manager/sole owner of Howard Stirk Holdings I & II Broadcast Television Stations and the 2016 Multicultural Media Broadcast owner of the year. To find out more about him and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.