 Hello everyone. Good afternoon. And welcome to the 2022 annual undergraduate economics club debate. My name is Esosa O'Sunde and I am a sophomore economics major and your moderator for today's debate. So this session will be recorded. I just want to let you all know and the recording will be available on the economics department's website. All right. So today's proposition for debate is that the United States should move towards a model of loan forgiveness in the amount of $25,000 for all student loan debtors. On the matters of format, the debates would go as follows. We will begin with the 15-minute opening statements from each group, starting with the affirmative. Then we will have a five-minute break. Next, we will get into a 16-minute argument and rebuttal section that will be broken down into four-minute segments, meaning it would go from the affirmative speaking for four minutes, then the negative, then the affirmative, ETC. We will then have another five-minute break. And then we will have a 10-minute question and answer portion from the judges. We will finish with the five-minute closing statements from the affirmative and the negative, with the negative having the last word. Do we got it? Everybody got it. Okay. Now, on the matters of keeping time, I will be tracking the time on my phone to ensure everyone is getting the appropriate amount of time to speak their case. I would also, you know, display a thumbs up and or like a glance at one of the sides to let you guys know when you have one minute left so that you can begin to wrap up your thoughts. Okay. Now, I will introduce the participants and the judges. So, for the affirmative side, we have Olivier Bradley, Jordan Hoard, I'm so sorry, Heidi Matz, Shreya Gurav, Owen Moroski, Jay Gupta, and Shirin Rashid. I'm sorry if I mispronounced any names. I'm so sorry. And then for the negative, we have Kam McDermott, Nick Quigley, Grace Davis, Dylan Partner, Ayan Sarma, and Chris Brady. Just wanted to acknowledge him, Simon White was also contributed to research, but could not join us at today's debate. We will have a few members step out just before four o'clock due to mandatory engagements. And now our judges this year are Juan Camillo Cardenas. I'm sorry for mispronunciation. A professor here in the economics department, Tom Peek from the Donahue Institute, and a longtime member of the economics alumni advisory board. And lastly, Patrick Fenton, a member of the economics department staff, now serving as academic programs manager. Thank you so much for taking our time to judge and this debate this afternoon. Now that all of the rules and the participants have been introduced, we will now be able to start the debates. Okay. So I will give the first floor to the affirmative. You have 15 minutes for the opening statement, and please come towards the front to speak here, because it's the only microphone we have. Can we give them a round of applause, please? We affirm resolved. The United States should move towards a model of loan forgiveness in the amount of 25,000 for all student loan debtors. Contention one is closing the gap. Subpoint A is progressing towards racial equity. When it comes to racial equity, the United States has a long way to go. A long history rooted in systemic racism has left black Americans with not only diminished average socioeconomic status, but also lower intergenerational economic mobility. The likelihood that children achieve a higher standard of living than the household in which they were reared. Put simply, not only are black Americans in a worse opposition to begin with for historical reasons outside of their control, but it's also harder to escape that position and break the cycle. Now that we've outlined the issue at a broad level, let's dive deeper and examine the evidence. Systemic racism, sometimes called casteism for its similarities to the caste system in India, permeates the entire labor market in and out like a toxin. Dictating either directly or indirectly, who gets access to desirable housing, clean air, stable jobs with strong exit opportunities, credit, healthcare, and education. Just to name a few. We won't delve into each of these individually, but to provide one of the more relevant examples, let's look at job discrimination, since it's to some extent a function of college education. Recent experiments have shown that the same resume has a significantly lower callback rate when the name listed sounds black as opposed to sounding white. Furthermore, these differentials only grew as the credentials were improved. Whites with better credentials got 27% more callbacks, whereas there were negligible differences for the African American candidates. While theory might tell us that competitive markets will eliminate discrimination, employers in practice consistently exhibit biases, whether implicit or explicit, that contribute to systemic disadvantages for hardworking black Americans who are equally if not more qualified than their white counterparts, but are limited by their environmental circumstances. Forgiving student loan debt would help support more equal opportunities and equality education for all, which directly impacts better job placements in the future and helps counteract racial discrimination and turn inequality. Next, according to the Urban Institute in 2016, the wealth of the typical median white family is roughly 10 times that of the median black family. And here we have that depicted here where we can see the median household net worth in 2019 dollars, where we see this vast differential between white and non-Hispanic families and racial minorities. And so we're still, Neil Lewis from 538 explains that in 2021 that for a myriad of reasons, many Americans currently misperceive the state of racial progress in the United States, meaning that they see far more racial progress than has actually occurred. Krause et al. in 2019 helps quantify this differential, citing new evidence from a nationally representative sample of adults showing that respondents thought the black-white wealth gap was smaller by around 40 percentage points in 1963 and around 80 percentage points in 2016 than its actual size. The article furthers by encouraging readers to consider not only structural, but also motivational and cognitive factors that contribute to this detrimental disconnect between perception and reality. This means forgiving student loan debt is more crucial than ever because it would allow previously marginalized communities to, with poor access to educational opportunities, to tell their stories and facilitate the mutual understanding and radical empathy that our country needs to progress towards racial equity. Now, having established a few statistics describing the state of America's racial inequities, we will examine how closing the gap through debt forgiveness will help address and mitigate these issues both in the present and the future. In the present, forgiving college students of debt will have a disproportionately positive effect on African-Americans. The Education Data Initiative provides further insight in 2022, outlining that black and African-American college graduates owe an average of $25,000 more in student loan debt than white college graduates. They pushed even deeper with a disheartening statistic. Four years after graduation, 48 percent of black students owe an average of 12.5 percent more than they borrowed, while after that same period, 83 percent of white students owe 12 percent less than what they borrowed. I'll close contention one with a quote from one of my favorite authors, Isabel Wilkerson. In her groundbreaking novel, Cast, The Origins of Artists Contents, Wilkerson describes the similarities between a 2017 Indian book, Ground Down My Growth, and Present-day America, explaining how contemporary slavery has simply taken on a different form, saying, the colonial power has officially established slavery in India, the United States, in 1843, 1865. But this simply led to its transformation into bondage through relations of debt, which has been called debt peonage by scholars. The only way to break these figurative chains, at least in the short term, is to forgive outstanding debt. Thus, forgiving student loan debt would help meaningfully address systemic inequities that have persisted throughout time. Forgiving student loan debt won't solve systemic racism, but certainly a step in the right direction. The second point is aiming for extensive gender equity. According to the American Association of University Women, women hold two-third of the student loan debt. As mentioned earlier, black women hold the highest amount of student-owned debt among all the racial and gender groups. Student, this phenomenon is attributed to three separate trends. The first is that women earn 17% less than the male counterparts, which is, and part of their payments go towards interest payments. It makes it harder to keep up with the interest payments. Additionally, more than one-fourth of the income goes towards the payment of the student debt, which makes it harder to climb above the debt. The second is that women attend college at a more higher rate than men. Wall Street Journal found out that 1.5 million fewer students attend college, and men accounted for 70% of the decline. There is no data to support this decline, but men attend less. The third point is that students have less access to straight jobs and construction jobs on average pay three times as much as the federal minimum wage of 7.25, but only 3.2% of the workers in trade jobs are women. Women are limited to higher education at academic institutions. Forgiving student debt will lead to women's economic empowerment and liberalization. We did not have an opportunity to build wealth until 1950s, yet women have advanced past men with better grades and graduate degrees. Forgiving 25,000 will lead partially to offset the disgusting wage theft called sexism. So I will be doing sub point C for contention one, breaking the cycle of poverty. The increasing wealth gap in the past 50 years is staggering. The Pew Research Center found that from 1970 to 2018, the middle class' share of wealth has dropped from 62% to 43%. While the upper class' share of wealth went up from 29% to 48%. This should be no surprise to any economist. This is the biggest problem facing America today, and student loan debt is preventing this from changing, but it could also be part of the solution. For years, colleges, high schools, and professionals told low-income students that college was the best and the only way to escape the cycle of poverty. And there was data to back that up. In fact, the Bureau of Labor Statistics found an increase of $461 in weekly salary earnings for those who had a bachelor's degree versus just a high school degree. We told generations of low-income students that college was a guarantee out of the cycle of poverty, and it should be. It makes logical sense why low-income students wanted to reap these benefits. Lower-income students are also more likely to take out student debt because they don't have family. They don't come from families that can bear the cost of college. Status Dow predicts outstanding student loan debt will surpass $3 trillion by 2030, and the majority will be borne by low-class families, thus keeping them there. The World Economic Forum points out that those who are first-generation students had a median student loan debt of $48,000 by the time they graduated. Meanwhile, those who had family members who had gone to college before them had a median of only $22,000. That's half as much debt. But the $461 is just an average, and due to hiring and labor discrimination, it's often at no fall to the worker's own that they are not enjoying this boost of income. By forgiving $25,000 of student loans, the government can grant this boost of income to those who weren't lucky enough to find it in the job market. It would increase their real income, and it would decrease their time spent in a lower class by alleviating the pain of compounding interest rates. There is no downside because it will either help them escape the cycle of poverty or prevent them from being pushed further into the cycle. Lastly, those who default on their loans face consequences that push them further into poverty, such as low credit scores, legal troubles, and garnished wages. The lowest paid zip codes are the most likely to default on loans. What's worse is the racial disparity found in defaulting data. The Motley Fool, a financial research firm, found that in 2020, 7.6 of African American students defaulted on their student loans, while only 2.4 percent of Caucasians did. If the lowest paid are faced with the most financially taxing consequences, how is this bettering society? Forgiving loans now can minimize the risk of default and equivalently the risk of detrimental consequences. Contention to subpoint A and end to upwards mobility in the American dream. Not too long ago, education was more accessible for those from low income backgrounds. Since the 1980s, tuition at both public and private institutions has been rising far faster than income, which has led to an explosion in student loan debt. In the mid-1970s, historically tuition-free schools such as the City University of New York and Brooklyn College began to charge tuition to evade fiscal crises, ending a long-standing commitment to provide free tuition to the working class. In just the past three decades, the cost of an undergraduate degree has risen by 213 percent in public schools and 129 percent at private schools adjusted to inflation. During the 2008 financial crisis, state governments cut down on public funding towards higher education, which meant that students had to spend more out of pocket. Between 2008 and 2018, tuition for public four-year schools increased by 36 percent. Many also opted for higher education to wait out the weak job market, further raising costs of private schools due to higher demand. This graph represents data from the IRS and College Board. So here we can see that in 1988, the average tuition for a public four-year school was around $2,800 in real terms. By 2008, it climbed 130 percent to roughly $6,500 yearly, not including other costs such as those of textbooks and living accommodations. If income had kept up, the average American would be making around $77,000 annually, whereas in reality, income has stagnated around $33,000. Quoting Mark Cantrowitz, publisher of financial aid sites finaid.org and fastweb.com, as the out-of-pocket costs of a college education go up faster than incomes, it's pricing low and medium-income families out of a college education. Which means that often the most talented disadvantaged youth do not fare nearly as well as the least talented advantaged youth. Here's a graph on this graph from a Georgetown University analysis of data from the U.S. Consensus Bureau and Bureau of Labor Statistics. We can see that those with a bachelor's degree fare much better, averaging around $45,000 a year, whereas those without remain closer to $30,000. So our next up point is the fact that the current state of student loan debt is unsustainable. Today the average American with an undergrad education has up to $30,000 worth of debt, but however your typical 2021 high school graduate will rack up to $39,000 worth of debt. Of course, it is possible to get your loans forgiven, but out of 757,000 applicants, only 14,500 were approved. That is a rate of just under 2%. Thank you affirmative for your strong arguments and thoughts. Next, the negative team will have 15 minutes to give their opening statements. You have 15 minutes. Thank you. I'm sure the opposition is in favor of equity. So are we, but is student debt forgiveness really truly equitable? If the goal is to uplift the poor and increase the quality of opportunity, student debt forgiveness is not the way to do so. The majority of those who incur student debt and would benefit from its forgiveness are not those in poverty, but people in well-off households. This effectively means that working-class high school graduates will be paying for middle-class higher education through their tax dollars. As we can see, the top two income quintiles have over half the share of student loan debt owed. The middle quintile also takes on a sizable share, leaving the lower two with only 20% of the share of student loan debt. This means that student loan forgiveness would have a regressive effect and ends up benefiting the rich college graduates who have already been given so much. In the long run, college degrees are also a massive predictor of income and social standing throughout life. If student debt was not worth the investment of college, then why are more people going to college than ever before? The answer is that in most cases, the investment of college will pay out in the long term. If Eisenberg students whose parents can afford to pay their tuition are being subsidized by working-class high school graduates, that is hardly an equitable use of money. College graduates are already poised to be the most successful people in society, so prioritizing them with massive debt forgiveness would be largely inequitable. Hello everyone. Building off of Grace's previous points, while often touted as a way to relieve the burden on poorer students, the evidence shows that student debt forgiveness hurts poorer students. See, education is an important factor in how financially successful a person ends up in life. This is why forgiving student debt is often touted as a way of helping poor students. However, if you really want to help students of lower income, investing money into debt forgiveness is not the best way to go about it. If you want to help poorer students, one of the best way to help is investing in early childhood education. Research has shown that the earlier the investment, the greater the returns. For instance, research by Nobel Prize-winning professor James Heckman has shown that early childhood education can have an ROI as high as 13%, which decreases the later the investment is enacted. Student debt forgiveness really only takes away money from programs that have been proven to work. Additionally, when looking at the issue through the lens of class, debt forgiveness being regressive means that the benefits of the forgiveness go primarily to those with higher income backgrounds. Students from wealthier backgrounds are able to take out more debt and therefore are more likely to benefit from debt forgiveness. In other words, debt forgiveness does not help the students who need it the most. The fact of the matter is that the class disparity is not seen in tuition debt, but rather who gets to college in the first place. Investing in early childhood education and similar programs to solve the systemic issues to lower tuition would benefit low income students much more than the temporary Band-Aid solution that is student debt forgiveness. Despite the fact that deficit spending can be generous, the government does not ultimately have an infinite capacity to use money. Policymakers must be judicious when deciding when and how to allocate their finite resources, directing them to those who are most in need, that being the poorest and most vulnerable among us. While policymakers and citizens may disagree about whether giving to people who deserve grants, cash, or forgiveness is a correct way of going about things, most can agree that the government should focus, at least in theory, on aiding those who are most in need. Forgiving $25,000 in student loan debt is not a wise policy to pursue from this utilitarian viewpoint, because it is not targeted towards those who need forgiveness most. Arguments focusing on the racial inequality of student loans face a similar stumbling block. There is undeniable evidence that there is a gap in student debt owed by race, with black individuals owing relatively more compared to their white peers. However, this gap is significantly smaller than many portray it to be. Let's use Elizabeth Warren's debt forgiveness proposal during the 2020 election as an example. She proposed up to $50,000 for households under $250,000 in annual income, which while not exactly the same as the proposal at hand, has similar overall dynamics that we can analyze here. The Brookings Institution has found that the average borrowing household headed by a black person would save $24,437 under her proposal, while an equivalent white household would save $22,492. While the gap is there, it is far too small to make a meaningful contribution to the overall racial wealth gap. Some argue that non-targeted benefits or universal benefits are preferable to targeted spending. This often revolves around political feasibility and administrative costs. Firstly, if a benefit like Social Security is received by all, it makes it more difficult to pit interest groups against each other to repeal it. Secondly, if a benefit is universal, it cuts down on bureaucratic processes used to determine eligibility. Both of these points are valid, but not for student debt forgiveness. This is because universalism is only valid for programs like a universal basic income that benefit the poor as a larger share of their incomes than wealthy people, or at least as an equivalent share like Social Security, which nevertheless disproportionately taxes wealthier people. Student debt forgiveness, as we have shown, disproportionately helps the wealthier class. College is also an investment into oneself. There are many cost-effective options that still allow students to obtain an undergraduate or advanced degree. Take Community College, for example, which in America costs on average $3,700 per year. Or take the University of Massachusetts, where students on average only pay a little over $20,000 per year for tuition. These, compared to private or for-profit colleges that can cost up to $75,000 per year, leave Americans with a choice. Another premise is that student debt forgiveness is missing the forest for the trees. The large issue is that there are many options to fix the situation that do not involve the United States government spending a large amount of money. In 2017, students missed out on $2.3 billion in free college aid. In this 2016-17 academic year, over 1.2 million high school graduates did not fill out the FAFSA form, and of these 1.2 million, about 650,000 of them would have been Pell Grant eligible. There's also unused money through scholarships. Over $100 million every year gets wasted in scholarship money because students do not apply for them. And the premise here is that instead of the United States government shelling out more money to relieve student debt forgiveness, we should patch the problem and where it really is that money is going unused that is already budgeted in. The government does have a role to play in resolving the issue of growing student debt but not in the form of forgiveness. Student unforgiveness of $25,000 per person would cost upwards of $500 billion. This is a considerable amount of money to pay for a temporary solution that ignores the root cause of the issue. The reason why people have incurred so much debt is because the cost of attending public university is rising to outrageous levels over four times faster than the rate of inflation. So forgiving debt is nothing in the way of lowering these costs and only serves to perpetuate the crisis if costs are to keep rising. Forgiving debt now will provide relief at the expense of future generations. Instead of a more efficient, instead a more efficient and permanent solution would be to subsidize procedural costs of tuition to make the total cost of school less. This would decrease the amount of debt students would need to take out upon graduation and lower the barriers to entry associated with high tuition. So the graph shows the rise of room and board over the past 20 years from 2000 to 2019. And as you can see by the graph it is nearly doubled in the past two decades. So with the average cost of public university being in the realm of $20 to $22,000, you can see that room and board accounts for nearly half of all tuition students are paying. So half of the cost of college is not attributed to the quality of education whatsoever. So if the government were to subsidize part or all of these costs it would significantly reduce the amount of debt students would be required to take on and would serve to eliminate the cycle of poverty caused by debt and would reduce the amount of loans needed to be taken out in the future. While $25,000 in student loan forgiveness may seem on its face to be a one-time maneuver, it has a great chance of provoking a cascade of demands for more forgiveness. This isn't the fallacious slippery slope argument. In fact the continual postponement of the end of the student loan pause by the Biden administration shows exactly what its repercussions could be. Initially instituted to provide relief to people in the wake of the economic crisis that came with COVID. The pause and repayment has been renewed a grand total of seven times so far, most recently only this month, despite the fact that the economic crisis that necessitated it has long been over. Pressure groups have turned a stopgap supposedly one-time issue into a policy of indefinite length. Therefore while this debate is only about $25,000 in forgiveness, it's important to remember that such a move would set a powerful and harmful precedent. Debt forgiveness needs to be reconciled with one inconvenient question. Why do people who chose to go to college deserve assistance more than those who didn't? How does debt forgiveness discern between students and families who planned, budgeted, and took alternative routes through education compared to students who perhaps acted financially irresponsibly? It does not. It is worth restating that student loan forgiveness is tremendously regressive. Conceptually it is true that college educated students fare better earnings wise than individuals with no degree. The average income of a student debt household is $76,000. Furthermore 90% of children from the highest income families will only a third from the lowest income families do. It is baffling that the opposition is so fixated on subsidizing the wealthiest individuals with the highest future earning potential. Indeed our limited government budget would be better spent on programs that actually help low income families. If the funds proposed for a student loan forgiveness program were transferred to such programs as expanding SNAP benefits, Medicare, or a child tax credit perhaps, the benefits would be much more equitable. The SNAP program in particular has been found to raise health outcomes of impoverished children as well as lower male suicide rates. This is compared to forgiving student loans which has been found to allow Bradley to obtain his doctorate degree in underwater basket weaving without sacrificing his daily coffee. Second loan forgiveness completely dodges the underlying issue of college cost. Some might argue that the cause of the ballooning cost of college is correlated with the advent of cheap and proliferating government student loans. The amount of government student loans and grants has risen at a faster rate than the actual cost of college. So much so that the New York Federal Reserve estimates that for every additional dollar in federal student loans, tuition increases by 65 cents. The inference here being that colleges will raise costs to whatever students can pay, either with federal money or not. If the opposition's goal is to reduce student debt for future generations, not just this one, they would need to be pursuing, they would not need to be pursuing simple loan forgiveness. At best, all it accomplishes is an ineffective stimulus that sets the precedent that the government is going to bail out the next generation borrowers and at worst sets off a positive feedback loop of college's increasing cost even more. In summation, student loan forgiveness is a regressive subsidy. Wealthier individuals own the majority of student debt as well as the means to pay offset debt. Its regressive nature means that it is ineffective at solving systemic issues such as the racial wealth gap compared to other transfers. Loan forgiveness ignores the true issue at hand which is that college is too expensive. And that the next generation of borrowers will face an identical debt burden if not more burdensome as colleges are emboldened with a new precedent of their tuition being subsidized. This policy ignores funds already allocated to low-income college students exemplified in the unclaimed FAFSA funds totaling 2.3 billion annually as well as alternatives to a traditional 40 degree such as trade schools and community colleges. Simple loan forgiveness is a disservice to impoverished people in our country. Thank you negative team for your astute thoughts and arguments and now both teams will have five minutes to collect their thoughts and arguments for rebuttal and after that we'll have the 16 minutes argument section. Okay so your five minutes start now. All right thank you all so much for your time and now the affirmative team gets four minutes to lay out a counter argument and then after the negative team. So four minutes. Today in the United States there's over 1.6 trillion dollars in federal loans. We are one of the only countries in the world that has this amount of federal loans. Other countries such as France and Germany, Denmark and Finland offer close to free or free colleges. While in the United States 70 percent of college graduates will take out a student loan impacting their future. Other countries such as Canada cancel student loan after 15 years. Australian bars do not start making payments until their income exceeds $44,000 a year. Every other first world country almost every other first world country has lower college costs than the United States. These lower costs allow the college graduates to have more freedom. If we were to allow US graduates to have more freedom they would have more ability to pursue what they want to pursue. I've heard the opposition state many times that this policy is regressive and that we should allocate scarce resources towards the poor in the interest for the betterment of humanity. There is no reason why we cannot help the poor as well as those who are educated. Additionally it was mentioned that a disproportionate amount of the wealth is held by those with higher incomes. This may be true but different amounts of wealth mean different things to different people. If you're a poorer family $20,000 goes a much longer way. Additionally the interest accrued on that can leave you know a young person paying you know 10 to 20 percent of their disposable income for 10 to 20 years which is a huge drain. That money could be going to retirement, it could be going to saving up for a mortgage but instead it's going off to creditors. Additionally it was mentioned that this policy would create too much of bureaucracy but the solution illustrated by the opposition to mitigate this was to have students fill out a FAFSA. FAFSA does not equate to free college or less debt it's simply a license to incur even more debt and additionally we all know how much of a bureaucratic nightmare the federal student loan process is anyway. Lastly I've heard that it says the government is going to be subsidizing wealthier family student loans off the backs of the poor. The government is merely forgiving existing debt. That debt was already incurred it's out there and it's either going to be a drain on people who have already graduated college or not. Thank you. The pro team has made made many cogent and interesting and insightful arguments into the fundamental inequalities in the American economic system and our team in no way wishes to dispute that. We acknowledge that there are systemic problems in our economy systemic racism sexism and the blight of poverty which hasn't gone away. Unfortunately this debate is not about whether inequalities in the American in American society persist. It is about whether student loan forgiveness is the right thing to do and the pro team did not make the necessary connection between point A and point B. While presenting a numerous amount of points showing these inequalities and even occasionally these inequalities within student loan debt they did not show how in any way these two issues are connected. Out of 250 million adults in the American economy only 45 million of them have student loan debt. Is this in any way an adequate or appropriate response to these broad systemic issues in the economy? I don't believe so. Additionally when you look at student debt forgiveness as a way to close the racial wealth gap while we do agree that this exists and this is a factor of systemic oppression one might ask is this really the most effective way to go about closing this gap. If you look at the percent of debt holders then black people are disproportionately affected by student debt but when you look at black people and white people in this country as classes then you're going to see that like a blanket student debt forgiveness isn't going to disproportionately help black people as a class when you go like household on like a household to household comparison. The figure we had before of white families being forgiven about $22,000 to black families being forgiven about $24,000. When you're looking at percentage of debtors sure but if you're looking this in the context of changing the overall wealth inequality gap between the races then you can see that this is a completely inefficient way to do so. Additionally the affirmative side brought up that like this debt has already been paid like this is already something that has happened and the government would just basically need to wave their hands and then it would go away it's debt owed to them. But that's not really the way that the that this would would go into effect if this were to be a policy like this would still be considered government spending even though it would just be forgiveness so this still would have to be funded by tax dollars this still would have to be taken out of the budget this still would have to be something that you would need to account for in your budgeting. And when you take that money like that large amount of spending and when you take that large amount of spending and compare it against other more efficient qualities then closing the wealth equity gap is better achieved in other ways. I couldn't help but hear that the opposition just stated that only 45 million people have student debt. That is a staggering statistic especially because the majority of people alive in this country today are baby boomers who are alive at a time in which the average cost of college was considerably lower. Additionally I heard that it doesn't proportionately help with any blanket policy you're not going to have perfect equality but the main point is that as a whole this policy would help reduce the racial wealth gap. Additionally deficit spending is as old as time itself. The government has enough money to do this. The US Congress recently approved $728 billion in discretionary military spending meaning that they legitimately appropriated that money themselves. The resources are there we can do this it's time to act. So the opposing group argues that there are other policies that are better but we are arguing right now whether we should or should not do the $25,000 and I we believe that we have shown that there are more benefits than costs to the $25,000. Additionally you need to ask yourself efficiency over functionality. Yes it may not be the most efficient way but it's functional it will help people it will help individuals. Lastly public policy is difficult to pass. There is a lot of American support over forgiving $25,000 of loans but not a lot of American support for free preschool or free early education. So feasibility really needs to be taken into account and I think that public policy will go towards $25,000 over nothing at all. It's better to do $25,000 than nothing at all. So just briefly our opponents also try to frame this issue as if like this is a temporary solution and we're not actually addressing the root cause of the issue just the symptom but if you think about it is debt is debt just like does that stay within the generation? No. Debt carries over from generation to generation and we even see that in the lowest income families parents will sometimes even take out debt in their kid's name fraudulently and so what we see is that debt persists throughout time even after you die and so while they might try to argue that this is only a temporary solution we would argue that this is a solution that will interrupt the cycle of systemic racism and poverty and ultimately provide the boost that we need. Also they try to argue that oh yeah and just to kind of oh yeah they try to also say that oh this would only benefit the average when they mentioned the 50k example with Elizabeth Warren they try to argue that it would benefit the average white family by 22k and it would benefit the average black family by 24k but in terms of like relatively how much does this benefit these people we have to consider the differences in average income between those families so what what effect does it have on those families and so and lastly I think our opponents just broadly say they say okay there are more efficient ways to solve we both agree here that racial equity is a problem and that we should pursue some sort of solution what we disagree on is what is the most efficient way of addressing that however if they try to argue that our ways not as efficient I think that they need to kind of elaborate more and provide some more reasoning for how we should really implement the proposed alternatives. Alright so I think the most important question we should be asking is why exactly are students going into debt so we mentioned that the rising cost of tuition as being one reason another cost or another cause of growing debt which is disproportionately affecting African Americans has to do with higher dropout rates of college and so you have to wonder why are dropout rates higher for African Americans than they are for their white counterparts well this has to do with the fact that the communities where African Americans are concentrated are often are often significantly less funded their secondary education institutions such as high school and even earlier even into elementary school significantly less funded than white neighborhoods tend to be and so it really isn't surprising when you when you you know consider this that oh if the education is not better well of course the chance is the opportunities that African Americans have of progressing in society they're essentially set up for failure when they get to college and so the what you have to do to address the issue doesn't have anything to do with student debt well it does of course but I would say the main the way to address systemic inequality in America has to do with improving funding for secondary education and other alternatives to college you know there is trade school and a lot of other institutions like that that you know if your education is not as well you you can still you know go on you can still be you know you can well the team mentioned like construction well if more women want to be in the construction industry then they could you know maybe more awareness of you know women jobs in like trade school that help teach construction skills and I can think so it's not as if you know people of certain race or genders have to be bucketed into certain categories it really depends on the current social institutions and changing them to make them more accepting of other people so you could you could promote trade school as an alternative for for people if they're not necessarily college ready you know but student debt is not really the the perpetuator of of systemic inequality and by you know improving secondary education for low income communities and promoting all alternatives that don't acquire you to accrue debt would I mean would greatly reduce the the issues of inequality that are occurring another point we'd like to mention is oh all right well another point we'd like to mention is the idea that student debt forgiveness is popular so we should go with that well it's up to us to make the policy decisions that are impactful if we're going to shift the burden of paying student debts onto the taxpayer we should have a reason why and the fact is more effective solutions such as investment into communities and early childhood education are more effective use of taxpayer money um so yeah let's say thank you both for that heated and captivating argument now the judges will have two minutes to organize their questions for both teams and yeah two minutes please thank you judges thanks to both teams this has been great uh talking amongst ourselves uh one thing that we'd really like both teams to elaborate on a lot of the debate up to this point has been about equity it's been about gaps and it's been between how this you know the how this will affect the individuals who have who are holding these student debts we'd like to hear a little bit more about how you think this this policy would affect sort of the macroeconomic trends in the United States uh with this GDP uh whether that's fiscal balance inflation uh anything like that and so I would be interested in seeing uh what your thoughts are about how the proposed policy would affect uh sort of the broader economy time is up time is up time is up so now we would have the affirmative begin with their answer to the judge's question so first I would like to dedicate a little bit of time to talk about inflation you know it's been in the news uh quite a bit and there's been this narrative playing out that you know increase government spending whereas you know in the form of you know subsidies or whatnot is going to increase inflation I would contend that the inflation we have seen is you know highly localized such as you know the price of lumber tripling uh over a six month period in the summer of 2020 um additionally as people come out of their houses as people have saved up you know do the stimulus and whatnot and spend more and more on things like hotels and things like consumer goods on going to restaurants uh inflation is bound to pick up additionally global supply chain issues have exacerbated this the war in Ukraine is exacerbating it uh right now and much of the government spending uh in recent years has um been in the form of bailouts it hasn't actually gone to consumers to consumers and that's reflected itself in higher asset prices so the uh inflation we're seeing right now isn't necessarily due to direct direct government spending on the consumers additionally we feel that this would lead to more economic growth because although there are some exceptions there are some people out there who will rack up $400,000 worth of debt and still try to live like kings and spend as much as they want typically if you're more indebted you are more frugal and there's no reason uh why we would expect it to play out differently if loans are forgiven uh we should see an influx of money into the economy and an increase in the GDP so there's a lot of talk about how it also improves the lives like of wealthy people or improves it more than for the lower class but we'd argue that the lower class has a higher propensity to consume so they will consume what they save through the this $25,000 of forgiveness more than wealthy people will um also to counteract this high inflation trend the Fed is currently raising the interest rate which will hurt low income people because it will raise the borrowing rate student debt is not the only type of borrowing that low income or black families have to do so an increase in interest rates needs to be offset by some sort of loan forgiveness all right so we'd have the negative team come and present their own argument you have about two minutes 30 seconds all right so in our current uh macroeconomic situation forgiving student loans would truly uh do the remarkable it would be the worst of both worlds uh since our economy is overheated we do not need more stimulus uh our biggest problem right now is inflation and uh the other team has argued that uh the inflation is a localized problem in certain sectors it's due to the war it's due to supply chains however there's a simple problem with that why is the inflation rate one of the highest in the world in the united states this is not typical and is it a is it a coincidence that the united states had one of the highest uh had one of the largest uh stimulus packages in the world and for all the good or ill that that did uh that is almost undeniably uh responsible for part of the inflation increase and even in a hypothetical situation where we had a non-overheated economy inflation wasn't the problem and we needed more stimulus this would not be the most effective way to go about that it talked about it talked about how the marginal propensity to consume among uh poor people is higher and that is absolutely true however as we've conclusively shown student debt relief would not target the poor if we really wanted to do those sorts of effective interventions there are time tested proven ways to do so for example temporary assistance for needy families child tax credits these are basic uh straightforward ideas for how to make working people's lives better and stimulate the economy if necessary guess what hurts working families the most right now it is no wage growth due to high inflation so right now we need to focus not on that but on what matters which is high inflation we need to get that down we need to uh slow the overheating of the economy and therefore forgiving student loans is not the right option thank you so much um judges do we have any more questions for them oh no more questions okay wow all right so okay so we're going to move to the closing statements and first we'll have closings from the affirmative for three minutes so okay are you ready okay so my associates and I have spoken much about how student loan debt fuels discontent stagnation inequality and stifles educational progress those who have not had ample opportunity to succeed those who are more likely to drop out of college will benefit the most from this sort of policy as they did not get serious value out of the debt that they had to incur many pundits and citizens alike have begun to refer to higher education as a racket meaning an egregious scam perpetuated by public and private misbehavior and decades of government in action trust in government has steadily declined since the 1980s and doesn't seem to be getting any better the current administration's approval is in the gutter and in the past few days there has been some speculation that president biden is considering forgiving more student loan debt to improve his standing with the american people while this would not fix all this country's problems it would have left millions of former current and would be students all across this country who are sick and tired of being punished for pursuing an education it would take the heavy burden off the shoulders of young people whose immense financial ablic obligations are sadly the norm today it would prevent further interest from accruing on that 25 000 dollars worth of debt which could easily transform into 35 or 45 000 dollars after a seven to ten year period and lastly it would be a phenomenal gesture from this administration and may even be an important first step towards restoring faith in government once again thank you and so now we have the negative team have you come give your closing statements the proponents of debt forgiveness advocate for an inefficient short-term band-aid solution to deep systematic issues the prohibitive cost of debt forgiveness prevents the government from investing in effective proven solutions to these issues such as early childhood education child tax credits or SNAP benefits with proven higher multiplier effects than loan forgiveness the opportunity cost of implementing this program in comparison to the greater beneficial alternatives is massive these funds we better spend on these alternative programs that are not as regressive as loan forgiveness which some may equate to the feudal system and it's inequitable allocation to those collectivized at the top starting a precedent of government for given student loans completely ignores the root cause of the ballooning cost of higher education in effect the federal government is paying for predatory for-profit colleges which are institutions where students have an outsized amount of debt from administration salaries and collegiate support facilities a bailout of these inefficient tuition allocations by the government is a poor use of resources assuming this policy was enacted tomorrow the clock is reset the day after with a new generation of higher education students with a new generation of higher education students borrowing lots of money to pay for higher education the exception being the difference being that the tuition is a lot higher as a result of this bailout this all circles back to the concept of equity in the search for equitable policy student debt forgiveness is not only need-blind but is fully regressive in its implementation it bolsters the top two quintiles which are already successful rather than using more efficient policies to help those who are actually struggling i would consider the opposition schooled this has been truly enjoyable um thank you both for your arguments and your strong footings on this matter and now we'll let the judges deliberate on who the winner of this debate is going to be thank you very much judges okay finally the judges have come to the end of their deliberations and now we'll have tom peep from the donor who institutes and a longtime member of the economics alumni advisory board come and give us the results round of applause please so i've judged a few of these and uh what i think was interesting about the conversation i had just now is i think this is the first time that the judging opinion was not unanimous um which is exciting uh and the reason for that is is that you both did a great job um there was i think uh yeah let's just give it up for everybody this is a very complex issue and in or just dealing with it and couching it in the right public policy context uh was difficult we were particularly impressed with the rebuttals that went back and forth and how both teams seemed to be listening to one another responding to their points couching those points in the broader context of both economic theory and of current events uh so that was great ultimately we thought that when it came to this debate and arguing the the case before them strongly most strongly we do uh sort of two to one we decided to give it to the negative team but both teams did fantastic and i have to say having done a bunch of these this is one of the best ones i've i've i've seen yet so great job both teams very happy to judge this thank you can we give another round of round of applause to the negative team they did such a great job and a round of applause to the affirmative team too so congratulations to all of the participants and thank you once again to our judges for being amazing and once again a recording of the debate will be posted on the website of the department of economics and yes this concludes the 2022 undergraduate economic clubs debates once again my name is Esso South Cindy and i've been your moderator today and i hope you all have a fantastic time with the 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