In May, American billionaire Robert F Smith told a hall of 396 graduate students at Morehouse College in Atlanta, Georgia that he will clear all their student debt which equals to approximately $10 million. While many people thought this as an act of kindness, some question how one person has enough wealth to wipe 396 students’ debts.
In the United States, 44 million students owed approximately $1.6 trillion which could be the 11th largest nominal GDP, greater than South Korea and Russia but the question of whether to wipe it completely for everyone has been lingering on many people’s minds.
Democrat Candidate Bernie Sanders promised on his campaign trail to wipe all student debt. The Vermont senator went a step further than fellow Democrat candidate Elizabeth Warren who earlier promised to provide debt relief to many students but not the extremely wealthy. One reason is that they do not seek student loans but allow their families to pay the fees.
Both candidates plan to tax the extremely wealthy and massive corporations to fund this policy.
Those who oppose this proposal argued what about the people who already paid off their student debt which is and why should a person take a massive loan to fund their further education with no viable plans to pay them back and expect tax payers to pay for it.
First, studies already show gaining a college degree will increase the amount of money on average than a person who doesn’t have one throughout their lifetime. So, it is an important investment.
Secondly, the money they earn will be taxed and used to reinvest in the economy.
Thirdly, Philip Klien argued Elizabeth Warren’s proposal is a “slap in the face to all those who struggled to pay off their loans’ which gained a lot of support from other conservatives; which is laughable considering they rather want others to go through the same pain and misery than allow the government to relieve the crippling debt.
Back in 2010, the Liberal Democrat leader in Britain, Nick Clegg promised to scrap tuition fees if his party won the elections.
Instead, he formed a coalition with the Conservative Party and tripled the tuition fees from £3000 to £9000 a year. The Conservatives and other political parties use this u-turn policy to obliterate the Liberal Democrat Party in the 2015 elections but many do forget it was the Conservative Party which aided in the tripling of tuition fees.