The amount borrowed to cover school costs is referred to as student debt. Government and commercial lenders like banks and other financial institutions are two options for people to borrow money for their student loans. In the US, student loans help facilitate learners from low-income families to pursue their educational obligations. However, default on paying back the cash has seen most students have poor credit scores hindering them from obtaining credit from other financial institutions. Moreover, the amount owed may increase after the interest accrued within the given period. 92.7 percent of total student debt comprises unpaid federal loans, which have a balance of $1.617 trillion. Following the economic crisis faced by most students from low-income communities in the US, they have yet to be able to pay back their loans. As such, president Joe Biden decided to scrap the $20,000 loan owed by over a 40million students in the US. The move has faced many controversial questions on its eligibility by courts and atheists. This paper will critically analyze the ethics of canceling student loans and come up with a straightforward take on the issue.
Education is considered a lifetime investment for an individual; graduates gain job satisfaction, family stability, and mental and physical health. Some believe that eliminating student debt is a giveaway for people who have been on the path to financial success, given the advantages of a college education. In addition, canceling debt goes against the moral precept of keeping agreements. Immanuel Kant proposed that debtors have a moral obligation to uphold their loan arrangements since breaking pledges is insulting to oneself and others. He pointed out that when someone commits, others depend on that commitment and anticipate them to keep it.
Cancelation of the loans given to students may also increase the inflation rate in the US following the witnessed economic crisis. Moreover, this move will not be morally effective as the taxpayers who never benefited from the aid will be overtaxed to cover up for the money. Atheists have also argued that the move to cancel the loans shall instill moral hazard among the students and the general public. As such, they meant that people would deliberately borrow cash for unplanned purposes with the mentality that the government would come to their aid once they failed to pay back.
On the contrary, those who supported the president’s move to cancel the student loans have based their arguments on respect and fairness for all. In the US, most students who have not been able to pay the loans come from the black minority community, first-generation, and low-income earners. Compared to the previous generations in the US, 70% of students in the current era have taken student loans and have found much burden repaying the debts. The first moral ethic considered in canceling the debt is the disparity in benefits and costs of education. John Rawls, in his philosophies, argued on fairness and, as such, equal opportunities should be presented to students to enable them to pay the loans.
However, even though loans for education are meant to open doors for students from underprivileged backgrounds, these chances frequently do not materialize due to academic obstacles and salary disparities in the job market. Black students with the same qualifications as whites earn approximately 20% less salary. Moreover, the income of first-generation graduates is reduced compared to the previous generation, thus causing a challenge in paying back the loans. Student loans have also created constraints and distress in the borrowers’ lives. Young adults face mental and physical health issues following financial conditions brought about by the covid-19 pandemic and other life adversities. As a result, the students are confused about balancing between paying back the loans or moving on with their lives, including buying assets, starting businesses, and establishing their families.
I support the move by president Joe Biden to cancel the student loans following the moral argument. According to ethics, the borrowers’ lives have been hampered and made difficult by student loans, and there is a mismatch between the costs and benefits of education. To ensure that moral hazard is done away with altogether, the government should do away with loans but develop educational programs that will do away with future student loans. Examples of these programs include those enforced by Tennessee Promise and New Mexico programs, which have offered scholarships to students and blended their learning to enable them to manage their educational costs. Doing away with the loans shall also allow the students to use their money to develop in other sectors, thus boosting the country’s economy. Lastly, the initiative shall also ensure that racial discrimination against Black students in the US is done away with.
In conclusion, the US president’s student debt cancellation move has faced much opposition regarding its legibility. Those against the move have argued that the cancellation will see many students have the moral hazard of not repaying their debts. The movement will also break the agreement between the borrower and the financial institution on the repayment terms. Moreover, the move shall promote inflation in the country and be unfair to those previously paid. On the contrary, the supporters have argued that canceling the debt shall enable the affected people to boost their financial gains and overcome the mental and physical health challenges they face in paying back student loans. Following the moral justification that the borrower’s lives have been restricted and made more difficult by the student loan debt and that there is a mismatch between the expenses and advantages of education, I endorse President Joe Biden’s decision to cancel the student loans.