You may be familiar with the game “Would you rather?” In the board game, players choose between two equally bad – or equally good – scenarios. It can lead to a lot of speculation, conversation, deep thinking and laughter. But if you’re paying off student loans, the answer to the question, “Would you rather get $2,000 this month or get your student loan debt erased?” should be obvious.
Students who graduated in 2019 left college with an average debt of $30,062, according to US News & World Report. A stimulus payment of $2,000 per person could help pay rent, utilities and your car loan for a month. But canceling debt of up to $50,000 could open the door to financial freedom for the 42 million Americans who face student debt.
If President-elect Joe Biden keeps his promise to send $2,000 stimulus checks to Americans ‘immediately’ after taking office, however, those with student loan debt may have no choice. between $2,000 in cash now or tens of thousands of dollars. in loan forgiveness.
What does one have to do with the other?
First, paying off student loan debt is an expensive choice. The loan forgiveness could cost the federal government $400 billion to $450 billion, according to Forbes. And stimulus checks, while expensive, would put money in more people’s hands.
The proposed stimulus checks could be part of The Heroes Act, a stimulus package that was halted by Republicans in Congress last year. The law also included $1 trillion in state and local aid.
States could, in theory, use this aid to distribute and administer COVID-19 vaccines more quickly and efficiently. Giving more people immunity to the virus could help revive the US economy better than any aid package, but states are struggling right now. The Centers for Disease Control and Prevention said more than 70% of our vaccines remain unused.
When it comes to increasing coronavirus aid – for businesses, states and individuals – or canceling student debt, we face a classic case where the greater good outweighs the needs of the few. Even though the few in this situation total 42 million Americans facing student loan debt, they may never repay.
Of course, a compromise is possible. Biden could choose to cancel up to $10,000 in student debt per person, or cap revenue on debt cancellation, while still handing out stimulus checks.
But amid negotiations for another coronavirus stimulus package and problems with vaccine distribution, student debt forgiveness could be tabled in favor of more immediate concerns.
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This article originally appeared on GOBankingRates.com: Why a $2,000 stimulus is ideal for you – unless you have student loans