Good morning,
Just talking about student loan debt cancelation gives Skyler Pearson chills, and makes her want to cry.
When Pearson launched Portland, Oregon-based indoor farming startup Nexgarden in 2017, she had no idea how much her nearly $50,000 of student loan debt would tighten her operational budget and limit her access to capital. So when President Biden took office, Pearson's mind went straight to one of his campaign promises: student debt cancelation. Indeed, Biden and other top Democrats have quickly made student loan debt forgiveness a top priority.
The president has advocated forgiving $10,000 of debt per borrower, while Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.) have pushed for a more aggressive $50,000 per borrower. The state of entrepreneurship hangs in the balance, especially as the U.S. manages its post-Covid economic recovery. Small business traditionally plays an outsized role in job creation following recessions, and the country's record $1.7 trillion in student loan debt, spread across roughly 45 million people, threatens to limit legions of young and middle-aged dreamers from taking the entrepreneurial leap.
Economists and small-business policy advocates agree: A federal debt cancelation policy could boost entrepreneurship rates and unshackle debt-ridden entrepreneurs to pursue more aggressive growth plans. But which is better: $10,000 or $50,000? It's more complex than you'd think.
Read our story to learn the unintended consequences of forgiving too much or not enough debt--and where the ideal number for the sake of entrepreneurship falls. |
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