NPR: What would happen if student loans were forgiven?

UC economist joins NPR's Marketplace to discuss student loan forgiveness

NPR's Marketplace wanted to know what would happen if some or all student loans were forgiven and turned to experts, including University of Cincinnati economist Michael Jones.

Michael Jones, PhD
Assoc Professor
Academic Director, MAECON
LCB-Economics

Michael Jones, PhD, associate economics professor-educator and Kautz-Uible Economics Institute Academic Director.

Jones, PhD, the Kautz-Uible Professor of Economics at UC’s Carl H. Lindner College of Business, said the pause on student loan payments in the early days of the COVID-19 pandemic was a relief for millions of people. Now that unemployment has decreased and the economy has strengthened, Jones said, the justification for the pause isn't as strong.

If President Joe Biden's plan to cancel $10,000 to $20,000 of debt for some borrowers was enacted, Jones said, economists worry it could add to inflation.

Another concern of forgiving student debt is “moral hazard,” the idea that students might make riskier choices if they think their debt will end up being forgiven, Jones said.

See more from Marketplace.

Featured image at top: Interior of UC's Carl H. Lindner College of Business. Photos/Andrew Higley/UC Marketing + Brand

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