Noah Smith, Columnist

Forgiving Student Debt Isn’t a Great Stimulus Plan

If a quick boost to the economy is the goal, there are better ways for a new President Biden to use his executive power.

November 18, 2020 at 7:00 AM EST

By Noah Smith

Noah Smith is a former Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

U.S. students have $1.6 trillion in debt. — U.S. students have $1.6 trillion in debt.
Photographer: Maddie Meyer/Getty Images North America

Before it’s here, it’s on the Bloomberg Terminal

LEARN MORE

This article is for subscribers only.

As President, Joe Biden will face an uphill battle to resuscitate the U.S. economy. If the Senate remains in Republican hands, he'll be forced to rely on the limited powers of executive action. Forgiving student debt is one potential action Biden allies are already discussing . But while this would be a good policy in many ways, it probably wouldn't be a highly effective fiscal stimulus.

The U.S. has a lot of student loans. Since the Great Recession, education-related debt has surpassed that of autos and credit cards:

Before it’s here, it’s on the Bloomberg Terminal

LEARN MORE