In today's US political climate, a big talking point for some of the Democratic Party candidates is the forgiveness of student loans. Whenever I hear this discussed among my peers, the consensus is that it can't happen because there would be no way to pay for it.

Today, I saw this article that states

Republican tax cuts cost more than forgiving student debt

The article references .gov sources regarding the tax cuts cost, so it seems at least somewhat legit. On the other hand, I don't see any sources referenced regarding the student loan balance, and even if that balance is correct, is the cost of "forgiveness" really the same as the total student loan debt?

In general, is the claim that forgiving student loans would be less expensive than the 2017 tax cuts accurate?

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    even if that balance is correct, is the cost of "forgiveness" really the same as the total student loan debt? - I'm not sure there's an objective answer to that. On the one hand, student loan debt is nondischargeable, meaning it cannot be eliminated in bankruptcy, so it's more valuable than "typical" unsecured debt. On the other hand, if the loanee is broke, you can't just magick the money into existence, bankruptcy or no bankruptcy. Maybe there are studies on this, but I can't imagine it's a straightforward question.
    – Kevin
    Commented Jul 6, 2019 at 23:41
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    When I read the article both numbers are referenced. Student loans come from the Federal Reserve, the other from the budget office.
    – redleo85
    Commented Jul 7, 2019 at 8:25
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    Probably a better question for Economics.SE
    – Oddthinking
    Commented Jul 7, 2019 at 13:00
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    @Kevin - plus there are also, potentially, indirect economic benefits to young adults having money to either spend or save. Commented Jul 8, 2019 at 15:59
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    Technically speaking, tax cuts don't cost anything. They have the unlikely potential to reduce government receipts, but that is not a ”cost”
    – warren
    Commented Jul 12, 2019 at 18:12

1 Answer 1


It's nebulous.

Total student loan debt is estimated at around $1.5 trillion Forbes, while NerdWallet places the total federal student loan debt at $1.4 trillion (and puts the total at $1.6 trillion).

POLITICO estimates that the tax cuts will cost about $2.3 trillion over ten years, assuming that the cuts run that long. The additional revenue generated by the tax cuts over that period is estimated to range between $1 trillion and $1.3 trillion, so the "net" is that same $1 to $1.3 trillion range.

Thus there could probably be arguments either way, but at the very least the two figures are comparable.

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    @Acccumulation - The details are pretty much speculation at this point. Commented Jul 7, 2019 at 18:30
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    @puppetsock - There's never been any question that cutting taxes has a boosting effect for business (at least in the short run). But Laffer vastly overestimates this effect. (And if you want to discuss this topic further you should go to the Economics SE.) Commented Jul 8, 2019 at 18:03
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    @puppetsock The problem is that evidence suggests that we are already on the left side of the U-shaped Laffer curve: cutting taxes may help business, but taxes are not high enough that cutting taxes actually increases revenue. At the same time, cutting taxes can hurt by reducing government spending, which is interestingly not just burning money away but actually goes to things like paying salaries for teachers and construction workers. Politico's estimate accounts for the increased revenue: that's why they estimate the cost will be $1-1.3 tril rather than $2.3 tril. Commented Jul 8, 2019 at 18:05
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    @puppetsock - This discussion belongs on Economics SE, not Skeptics. Commented Jul 8, 2019 at 20:32
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    @puppetsock i think you misunderstood what I was asking for. If unemployment has been going down every year since 2012, then of course it’s lower now than it has been in all that time, and it can easily be lower than ever before. But if it’s been going down by the same X% every year, then the tax cuts had no effect on it, but if it were X% before and (X+1)% since the cuts, then they have been increasing employment. Please provide a source for the tax cuts reducing unemployment compared to what was already happening.
    – Bobson
    Commented Jul 9, 2019 at 17:22

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