The Association needs to remind the readers to read this article, very carefully. Pay attention on:
- Who wrote the article and
- How “moral hazard” has been defined.
Part of the opinion is quoted below:
“He continued: “For example, the economic benefit would likely only be transitory if debt forgiveness was a one-time windfall for current borrowers, as future generations of student loan borrowers would ultimately return to debt-based financing to meet rising college costs.”
In addition, canceling student loan debt now could lead future borrowers to expect that their debt will be erased as well, and give them an incentive to take out even more loans, Foster wrote. That “could ultimately exacerbate the acculmulation of higher student debt burdens in the future,” he said, which would make the current issue much worse.
This study or research is quoted by “Market Insider” which may lean toward the Wall Street. Interestingly, it is published on Nov 3rd, when NBC/Wall Street Journal reported that two advocates of the student loan forgiveness or bail-out program that run for the 2020 big dance are the top-3 nominees.
AAEA has long argued in that the student loan debt is the first step, and it should be followed by the second step. Read the second paragraph written on the Home page which pasted below:
“Partially fixing the current US student loan problem, other than to write-them-all- off is parallel with rebuild or remodel an old building. The cost could be higher than that of to tear-it-down. Too many players’ interests have contributed to the systematic errors which make it almost impossible not to completely overhaul the whole system. However, AAEA has hypothesized that writing off the student loan debt is the first step, and it should be followed by promoting efficiency and controlling the cost of education through tighter regulations and audits for Title IV or any recipients of federal and state funding. Because soaring education cost and inducing systematic errors in the system are the roots of the problem”..