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Jill on Money: Who benefits from student loan forgiveness? It’s complicated

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The idea of broader student loan forgiveness always sounds like a great concept but is it? The Federal Reserve’s recent Survey of Consumer Finances (SCF) noted that the nearly $1.6 trillion of student debt continued to be the largest source, in dollar terms, of non-mortgage debt owed by American families. That fact might lead you to think: let’s get rid of it. But critics contend that doing so would favor wealthier people. The Fed survey highlighted the issue, which has become a flashpoint in the conversation: “Student debt has consistently been disproportionately held by higher-income families, which likely can support their loan payments. Indeed, in each survey, more than half of outstanding student debt belonged to the top 40% of the income distribution, and the bottom quintile never held more than 14% of the debt.”

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