Tag Archives: student loan crisis

Moral Hazard in the Student Loan Market

Comprehensive debt forgiveness would create a strong incentive for current and future students to make riskier borrowing decisions. It may even have this effect if the policy is never enacted. Just as the stock market reacts to polling and election results, students may take more risk as the odds of a forgiveness bonanza under a Democratic president increase. But these decisions cannot be undone if the polls are wrong or if campaign promises are forgotten after Inauguration Day.

Source: Bernie Sanders and Elizabeth Warren Will Never Forgive Me – WSJ