The Forum | Costs

Federal Student Loan Forgiveness – What Really Should be Done to Bring Relief for Millions.

February 24, 2021 by Nick Down

The plight of the 42 million Americans with crippling student loan debt is at the front and center of the national conversation. At the end of 2020, student loan debt totaled $1.5 trillion and was the largest portion of household debt after mortgages, even larger than credit card debt, according to the Brookings Institution. Families are struggling to repay their loans, unemployment is on the rise, and the pandemic has exacerbated these challenges.

Several weeks ago, I wrote about actions taken by President Joe Biden to help ease the loan repayment burden by pausing payments until at least September 2021. Since then, Senate Majority Leader Chuck Schumer (D-NY), Senator Elizabeth Warren (D-MA), and Representative Ayanna Pressley (D-MA-7) introduced a bicameral resolution calling on President Biden to forgive up to $50,000 per borrower and continue the reprieve on payments until after the pandemic is over. However, at a recent town hall, President Biden stated that he could not cancel $50,000 per borrower, but would investigate canceling up to $10,000 per borrower.

These plans, however well-intentioned, fail to address the root issue: the failure of schools to control runaway spending.

Irresponsible spending on campus is making higher education increasingly unaffordable for the majority of Americans and jeopardizes academic quality. Administrative expenses have been on the rise for decades, with little oversight. Moreover, the surge in administrative spending is a major contributor to the skyrocketing cost of tuition. In 2014, ACTA released the report Getting What You Pay For: A Look at America’s Top-Ranked Public Universities, detailing the increase of institutional spending relative to tuition increases. Colleges and universities must rein in administrative spending and direct the resources they do have toward teaching and learning. For additional information on administrative and instructional spending by institution, visit  

A potential solution that institutions should explore could be to offer efficient but rigorous programs that allow in-person students to earn bachelor’s or equivalent degrees with less than 120 credits, the minimum number of credits typically needed to earn a degree in the United States. While the traditional bachelor’s degree is expected to take four years, the National Center for Education Statistics states that only “41% of first-time, full-time undergraduates seeking a bachelor’s degree received them within 4 years.” Less than half of students graduate in four years, which means that most students end up paying more in tuition as they attend extra semesters to fulfill requirements. Colleges and universities need to continue to explore alternative options for keeping costs low.

If shortened degree requirements prove successful, students and their families would save money, while institutions could cut back on spending. Some institutions and school districts already offer college credit for classes taken while a student is still in high school, and many colleges also offer accelerated online programs that allow students to earn a bachelor’s degree in three years. Why shouldn’t institutions consider offering more of these accelerated programs to in-person students?   

The popular adage goes, “There is no such thing as a free lunch,” which means anything that is free must, inevitably, be paid for by someone else. Providing one-time relief to current student loan borrowers is a near-sighted solution for the deep-rooted problem of the student debt crisis. The only way to solve this calamity in the long term is substantively to reform student financial aid and curb institutional spending by considering alternatives to degree attainment. More needs to be done than applying a solitary band-aid to a systemic problem.


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