Should We Stop Talking About Student Loan "Forgiveness"?

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Debate continues on President Biden’s student loan relief plan: the cancellation of up to $20,000 in debt for Pell Grant recipients and up to $10,000 for all others who now earn less than $125,000 per year. Critics of this proposal argue that President Biden lacks the legal authority to cancel the debt, that it funnels too much money to people who don’t really need it, or that it could increase inflation and taxes. I’m not a policy wonk, and I have no idea whether these things are true. But others have suggested a behavioral effect to student loan relief, and that’s where I can step in and call people on their nonsense.

• “It distorts incentives and encourages behavior that contributed to the ‘problem’ that it seeks to address.” (from Newsweek)
• “It discourages sacrifice and good behavior.” (from the John Locke Foundation)
• “It rewards bad behavior.” (from Forbes)

Debt has probably been stigmatized since about five minutes after the first loan in human history, and some continue to characterize debt as "bad behavior." This moralistic thinking muddies legitimate discussion about whether, why, and how we should eliminate debt. To address this issue, I offer a modest proposal: Stop calling it debt “forgiveness.”

Debt Stigma

Humans—being relatively slow, small, and weak within the animal kingdom—quickly learned that cooperation is our only means of survival and evolutionary success. Thus, we’re finely attuned to concepts of reciprocity and fairness. The Code of Hammurabi (approx. 1750 B.C.) lays out rules for loan repayment and debt relief. The Torah, Bible, and Quran all discuss debt. It’s perhaps unsurprising, then, that people who carry debt are often targets of shame and scorn.

Despite our societal expectations and economic demands that people attend college, student debt is still subject to this stigma. If you’ve been paying attention to the news, you know that people with outstanding student loans are often called irresponsible for taking on too much debt, failing to pay it back promptly, or both.

Moreover, only 41 percent of Americans support complete student debt relief, with that figure far lower among people without student loans. Yet it was reported last summer that 63 percent of Americans support free public college. Although the endgame here is the same—college degrees with zero debt—I would argue that the 22 percent of Americans who seemingly would make college free proactively but not cancel student debt retroactively is due, at least in part, to debt stigma.

And debt stigma can have far-reaching implications for well-being, with some going so far as to suggest that individuals with debt don’t deserve to live. The General Social Survey, an annual, nationally representative survey of Americans’ attitudes on all sorts of things, has often included this question: “Do you think a person has the right to end his or her own life if this person has gone bankrupt?” The fact that someone even thought this was a pertinent question tells you a lot about debt stigma, but so, too, does the fact that endorsement of this item almost doubled between 1983 and 2014 (from 6.6 percent to 12.1 percent). This fact may be the ultimate indication that debt is far too entrenched in terms of “right” and “wrong.”

Canceling Forgiveness

As a social psychologist, I know that words matter. People are more compelled to “be a voter” than “to vote.” People judge a car as going faster when it “smashed into” another car versus “hit” it. Recently, professors discussed via Twitter how renaming "office hours" to "drop-in hours" or "study hours" boosted student attendance.

Thus, it always strikes me when I hear people talk about loan “forgiveness.” Given the prevailing connotation of that word today, forgiveness seems to reinforce the idea that debt is indicative of poor character, moral bankruptcy, sinful nature, or even an actual crime. People with debt have done nothing wrong and, therefore, don’t require forgiveness. For better or worse, our economy is built upon the accrual and discharge of debt, whether you’re seeking a degree, starting a business, or buying a home. In most cases, the acquisition of debt is encouraged as the only means of making significant investments and building wealth. I don’t know about you, but I don’t send in my monthly mortgage payment with a note that says “I’m sorry.”

There’s a much larger conversation here about how we treat people who incur debt for any reason. But focusing on student debt, I would urge everyone to stop saying forgiveness. The White House has actually done a good job avoiding this word, except when referring to the Public Service Loan Forgiveness program. That name needs to change. And other prominent figures in support of loan relief can rid themselves of the term forgiveness so as to not inadvertently reinforce debt stigma.

Forgiveness Essential Reads

Toxic Forgiveness: Why 'Forgive and Forget' Doesn't Really Work

Mistaking Forgiveness for Reconciliation Can Be Dangerous

We can all begin to enact this change right now on the local level. Students and alumni will have lots of questions about loan relief, so do your best to scrub forgiveness from your vocabulary. Furthermore, colleges can update their own programs that “forgive” students’ outstanding balances or prior grades so they can return to school with a fresh start.

Given the possibility of internalized debt stigma, I would even remind students who use the term that they’ve done nothing wrong and need no forgiveness. Students have faced escalating college expenses, rising costs of living, stagnant wages, and various personal and national crises that have left many with loads of debt and often no degree. So let’s get rid of the hurtful moral overtones of “forgiveness” and focus on improving students’ lives.