This piece was originally published at CNN.com
What if the government wiped away everyone’s student debt?
Researchers at the Levy Economics Institute of Bard College say it’s a proposal worth considering.
It’s a “radical solution to the student debt crisis, but one that deserves serious attention, given the radical scope of the problem,” wrote Marshall Steinbaum, one of the authors of the report, in a blog post.
The researchers looked at what would happen if the government canceled all federal loans (the majority of student debt) and paid off all privately owned loans -— as a one-time policy.
Their economic models show that canceling student debt would lead to a boost in GDP by an average of $86 billion to $108 billion annually over the next 10 years. They also show that it would reduce the unemployment rate by about 0.3%.
Meanwhile the cost of paying off $1.4 trillion of debt would have a “modest” effect on the deficit and inflation over the next 10 years, the report said…