If you’ve got a lot of student loan debt, you’ve probably dreamed about mass forgiveness of all student loans. And that dream has never felt so close, since Democratic presidential candidates Sens. Elizabeth Warren and Bernie Sanders have each proposed a mass cancellation of America’s student loan debt.
Warren was the first to unveil her proposal, which would cancel up to $50,000 in federal student loans for borrowers who make less than $100,000 per year. Sanders’ plan went even further, promising forgiveness to every student loan borrower, regardless of their income.
But can this kind of large-scale student loan forgiveness actually pan out? Here’s what four student loan lawyers think about whether or not mass student loan forgiveness would work — and whether it could solve the student debt crisis in the U.S.
1. Mass student loan forgiveness is feasible, but unlikely
Student loan lawyer Adam Minsky offers legal advice to borrowers across Massachusetts and New York. He told Student Loan Hero that large-scale student debt cancellation was feasible, “it just requires the political will.”
In Minsky’s eyes, student loan forgiveness could go a long way toward helping the 45 million Americans mired in student loan debt. But it would need to be coupled with other reforms, including making college more affordable.
“If student loans were cancelled in whole or in part, and any remaining loans were afforded additional rights, options and protections, then yes, coupled with reform to provide more debt-free higher education options for families to reduce or eliminate future student loans, it could solve the student loan crisis,” said Minsky.
That said, he doesn’t think borrowers should count on a mass student loan forgiveness program happening anytime soon.
“A lot has to happen for mass student loan forgiveness to become a reality,” said Minsky. “There are only two presidential candidates proposing this. One of them would have to win the Democratic nomination, and then go on to win the presidency in 2020. Furthermore, any proposal would have to pass both the House and the Senate, which may be difficult.”
Without wide political support in Congress, a mass student loan discharge would be unlikely to pass, even with support from the Oval Office.
2. Forgiveness would need to become a top priority
Like Minsky, Indiana-based lawyer and founder of The Student Loan Sherpa Michael Lux believes a mass forgiveness of student loans is feasible, but borrowers shouldn’t get their hopes up about it happening as a result of the 2020 election.
“Unfortunately, this mass forgiveness is probably a long shot,” said Lux, who himself owes six figures in student loan debt. “Up until now, it wasn’t something really discussed by most politicians. Now that the discussion has started, the opposition is starting to emerge.”
Not everyone is on board for forgiving student loans or providing free college. Plus, Lux says, the student loan issue might not be a high enough priority for real change to take place.
“Another issue with mass forgiveness becoming a reality is where it stands on the list of Democratic [Party] priorities,” he said. “Universal healthcare is a bigger priority and also very expensive. Any political capital that a President Sanders or President Warren has may be spent before mass forgiveness gets put on the table.”
If forgiveness were to happen, it would need to become a top priority.
3. Student loan discharge wouldn’t go far enough to solve the debt crisis
Student loan lawyer Joshua Cohen shares Minsky’s and Lux’s views that mass forgiveness is unlikely to pass in the next few years.
“I don’t believe it will occur, because I don’t think there is enough support in Congress,” Cohen said.
But even if it did, Cohen doesn’t think it would go far enough to solve the student loan crisis.
“The part that’s missing is what happens to the current students,” said Cohen. “Is education suddenly free? Subsidized by [the] government instead of loans? Are loans capped? Is capitalization done away with (thus no more hugely ballooning balances)? Is the statute of limitations returned? Are bankruptcy protections returned?”
According to Cohen, Congress needs to address these issues if it truly wants to help students and borrowers.
“I support the idea of student loan reform, but I think it is more easily handled by giving back common-sense consumer protections,” he said.
For example, Cohen see capping the amount a student can borrow in private student loans as one of the most important reforms needed. By making private loans less accessible, Cohen thinks colleges will be forced to lower costs, thereby becoming more affordable for students.
“Schools [will be] forced to make choices — lower costs or lower enrollment,” Cohen said. “Until the ROI [return on investment] for a four-year degree returns, I see no reason to spend six digits for an undergraduate degree.”
4. Bringing back bankruptcy discharge for student loans might be more helpful
Attorney Marc Dann of Dann Law in Ohio also believes mass forgiveness is possible, but he says another solution might be even more effective: allowing student loans to be discharged through bankruptcy.
“Removing the bankruptcy exemption for both public and private loans would do more to create rational and fair outcomes for borrowers than any other proposal that is currently out there,” Dann said.
Starting in the mid 1970s, Congress began making it much more difficult for student loans to be discharged in bankruptcy, as well as removing the statute of limitations for federal student loans. According to Dann, clawing back this exemption would solve problems with both private and federal student loans.
And if some form of loan forgiveness does go through, Dann said, the government should prioritize certain borrowers over others.
“Careful thought should be given to which loans are least likely to be collected, minimizing the real impact on the Treasury, which borrowers were the most deceived or otherwise aggrieved in the origination process, and choosing to forgive the loans that might have the most positive impact on the economy,” Dann said.
But even a thoughtful approach might not make loan forgiveness a reality, with Dann warning that “forgiveness will be a tough sell to conservatives and moderates.”
Explore other options for loan forgiveness
If these attorneys are right, we probably won’t see a mass student loan forgiveness program passing anytime soon. As a result, you probably shouldn’t change up your repayment strategy with the hope your loans will be discharged.
Instead, explore your options for loan forgiveness from other sources, such as the Public Service Loan Forgiveness program. Depending on your profession, you might also qualify for loan repayment assistance from your state.
As these legal professionals point out, the benefits of loan forgiveness will only go so far. To solve the student debt crisis, we also need to lower the cost of college so students and their families don’t have to overborrow in the first place to afford their degrees.