Question

Would student loan forgiveness lead to productivity growth?

higher education in America remains relatively expensive and inaccessible to many people. He argues for major government investment in education in hopes of expanding access and, in turn, enhancing long-run productivity.

However, this view focuses primarily on investment in education going forward. It does not mention the already huge amounts of student loan debt already held by many current and former college students. A policy such as student loan forgiveness would certainly help these individuals, but its effect on productivity is less clear. Would there be long-run productivity growth created by retroactive investment in the form of student loan forgiveness?

Answer 1

Student loan forgiveness will lead to productivity growth in the long run.

The reason for this is that if the loans of students are forgiven, education will become accessible to a lot many more students for whom it is very expensive. This will help the students to develop skills and abilities with which they can contribute for the growth of the economy. Student loan forgiveness is a great policy for human resource development of the county which will help preparing the human resource for adding to growth.

It will also lead to increase in consumption expenditure, starting of businesses, collecting funds to buy own houses. All this will lead to growth of the economy.