The ethics of canceling student debt is more about fairness than broken promises

President Joe Biden’s plan to forgive US$10,000 to $20,000 of student debt for up to 40 million eligible borrowers was recently put on hold when a federal appeals court temporarily paused the program.

Six states had asked the court to block implementation of loan forgiveness until their lawsuits against the program were resolved. The states allege that they would be financially harmed if borrowers receive loan forgiveness.

As an ethicist who studies the morality of debt, my work explores the question at the heart of opposition to student loan forgiveness: Is student debt cancellation unfair?

The moral case against canceling

Educational debt is often regarded as an investment in one’s future. Millennials with a Bachelor of Arts degree, for instance, typically earn $25,000 more per year than those with just a high school diploma. College education is also generally correlated with a variety of positive life outcomes, including physical and mental health, family stability and career satisfaction.

Given the benefits of college education, canceling student debt appears to some as a giveaway for those who are already on their way to becoming well-off.

Canceling debt also seems to violate the moral principle of following through on one’s promises. Borrowers have a moral duty to fulfill their loan agreements, the philosopher Immanuel Kant argued, because reneging on promises is disrespectful to oneself and others. Once people have promised to do something, he noted, others rely upon that promise and expect them to follow through.

In the case of federal student loans, a borrower signs a promissory note agreeing to pay back the government and, ultimately, the taxpayers. And so student borrowers seem to have a moral duty to pay their debts unless mitigating circumstances like injury or illness arise.

The moral case for canceling

Fairness and respect, however, also demand that society address the magnitude of student debt today, and especially the burden it imposes on low-income, first-generation and Black borrowers.