Some economists argue that relieving student loan debt will help boost the economy. However, William Chittenden, an economist at Texas State University, writes that the economic benefits of canceling student debt might be modest at best.
“If all US$1.5 trillion in federal student loans were forgiven, the average borrower would have an extra US$393 per month,” Chittenden writes. “It is estimated that the economy would only grow by about $100 billion, or about 0.5% …”
Chittenden argues that student debt relief should be targeted toward borrowers that typically owe less than $10,000 but who are more likely to default on their loans. Demographically, this would benefit people of color and women the most, since women on average owe more than two-thirds of outstanding student loan debt, and 85% of Black college graduates owe money on student loans, compared to just 69% of white college graduates.