Forgiving Student Debt Would Boost Economy

Chris Arnold at NPR:

“In the short term, it would be very positive for the housing market,” says Lawrence Yun, the National Association of Realtors chief economist. He says his group’s surveys show that student debt has people delaying homeownership by five to seven years.

He’s not endorsing any particular plan, but he estimates that broad loan forgiveness would push up the number of home sales quite a bit. “Home sales could be, say, 300,000 higher annually if people were not saddled with large student debt.” Yun says that would be “a boost to the housing sector as well as the economy.”

The effects would go beyond the housing market. William Foster is a vice president with Moody’s, which just did a report on student debt forgiveness. “There’ve been some estimates that U.S. real GDP could be boosted on average by $86 billion to $108 billion per year,” which is “quite a bit,” he says. “That’s if you had total loan forgiveness.” Foster says it wouldn’t have to be total forgiveness to see significant results. And he says it could also help address rising income inequality.

More here.

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