Why Student Loans Should Not Be Forgiven Essay

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The idea of student loan forgiveness has been a hotly debated topic in recent years. While some argue that it is a necessary step towards achieving equality and providing relief to those struggling with debt, others believe that it is not a viable solution to the problem. In this essay, we will explore why student loans should not be forgiven.

From the responsibility of individuals to pay off their own debts to the potential negative consequences for the economy and taxpayers, there are many valid arguments against student loan forgiveness.

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Personal Responsibility

One of the primary reasons why student loans should not be forgiven is personal responsibility. Individuals who choose to take out student loans have made a conscious decision to invest in their education and future. While the rising cost of education and the limited availability of financial aid has made it difficult for some individuals to avoid taking out student loans, ultimately, the decision to borrow money is a personal one.

Forgiving student loan debt undermines the concept of personal responsibility, as it effectively absolves individuals of the obligation to repay the money they borrowed. This is unfair to those who have made the effort to pay off their debts, often through years of hard work and sacrifice.

Moral Hazard

Another important reason why student loans should not be forgiven is the concept of moral hazard. Moral hazard refers to the idea that if individuals know they will be bailed out for making poor financial decisions, they may be more likely to take risks and make those same poor decisions in the future.

In the case of student loan forgiveness, forgiving student loan debt sends the message that borrowers will not be held responsible for their actions. This could lead to an increase in the number of students who take out loans they cannot afford, knowing that the debt will eventually be forgiven.

This increase in borrowing would create an even larger student loan debt crisis in the future. The more individuals who take out loans they cannot afford, the greater the pressure on the government to forgive their debt, creating a never-ending cycle of moral hazard.

Economic Consequences

Another compelling reason why student loans should not be forgiven is the potential economic consequences. Forgiving student loan debt would come at a significant cost, which could have far-reaching implications for the economy.

Firstly, forgiving student loans would likely lead to inflation. If the government forgives student loan debt, it effectively injects a large amount of money into the economy, increasing the money supply. This increase in the money supply could lead to inflation as more money chases the same amount of goods and services.

Secondly, forgiving student loans could negatively impact the credit market. Student loans are a form of debt, and forgiving that debt would mean a loss of income for lenders. This loss of income could lead to a reduction in the amount of credit available in the market, making it more difficult for individuals to access credit in the future.

Moreover, forgiving student loans would create an unfair burden on taxpayers. The cost of forgiving student loans would be borne by taxpayers, who may not have benefited from the loans in the first place. This could lead to resentment among taxpayers, particularly those who did not attend college or those who have already paid off their student loans.

Alternative to Student Loan Forgiveness

Alternative approaches to student loan forgiveness include making college more affordable through increased financial aid, tuition freezes, and support for community colleges and vocational schools. Improving income-driven repayment programs could also help borrowers manage their debt. Another solution could be to hold colleges and universities accountable for the rising cost of tuition and to encourage them to provide more affordable education options.

Finally, promoting financial literacy education and empowering borrowers to make informed decisions about their loans could also help address the student loan debt crisis. These alternative approaches address the root causes of the problem and promote personal responsibility, rather than simply forgiving debt and creating moral hazard.


In conclusion, while the idea of student loan forgiveness may seem appealing, it is not a viable solution to the student loan debt crisis. Forgiving student loans creates moral hazard, unfair burdens on taxpayers, and potential economic consequences. Instead, policymakers should focus on alternative solutions that address the root causes of the problem, such as making college more affordable, improving income-driven repayment programs, holding colleges and universities accountable for rising tuition costs, and promoting financial literacy education.

By promoting personal responsibility and addressing the underlying issues, we can better support borrowers and create a more sustainable and equitable system for higher education.

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Why Student Loans Should Not Be Forgiven Essay. (2023, October 25). Edubirdie. Retrieved July 19, 2024, from https://edubirdie.com/examples/why-student-loans-should-not-be-forgiven-essay/
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Why Student Loans Should Not Be Forgiven Essay. [online]. Available at: <https://edubirdie.com/examples/why-student-loans-should-not-be-forgiven-essay/> [Accessed 19 Jul. 2024].
Why Student Loans Should Not Be Forgiven Essay [Internet]. Edubirdie. 2023 Oct 25 [cited 2024 Jul 19]. Available from: https://edubirdie.com/examples/why-student-loans-should-not-be-forgiven-essay/

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