Analysis: How does student debt relief impact the economy? 2:22 (CNN) — According to Benjamin Franklin, “investing in knowledge always yields the best returns,” but for many American students, the investment they make in a college education translates into financial debt that ties them to the banking system for years. decades. Currently, a year at a private university in the United States costs an average of US$38,070, while at a public university it costs US$10,740 each year, but it can be much higher for those who come from states other than where the university is located. Alma mater. Yeniffer Torres studied Art History in his native Cuba, arrived in the United States almost 8 years ago and decided to expand his knowledge through a master’s degree in Digital Marketing in order to open professional doors in his new country of residence. . She is one of 43 million people whom President Joe Biden’s administration has decided to forgive some of her student debt, which could cost the country nearly $300 million, according to Penn Wharton’s budget model. When Torres graduated in 2018, she barely managed to pay the interest of each monthly payment because the job opportunities did not present themselves as she expected, after completing her master’s degree and being one of the best students of the generation. Although she improved her English level, she began to doubt if her master’s degree was a good investment. “I don’t think I really got that much out of the master’s degree, I thought it was going to open more doors for me, but it didn’t, so one wonders, I have a debt of US$ 30,000 for something that hasn’t taken advantage of it”, Torres assures. With the start of the pandemic in March 2020, her debt was frozen along with that of thousands of students. Now, she anxiously awaits from her her part of her forgiveness, which will be a balm for an outstanding balance that at times has become priceless for her. “I think interest is what affects people the most, it’s too high, I have 6% interest,” she says. Once she receives the financial waiver, she plans to refinance the debt, so that her payments are lower. The decision of the federal government has caused a whirlwind of opinions, as many believe that this plan will increase the already existing inflation in the country. For example, Senator Marco Rubio criticized the remission and assured that this will be “an unfair burden for working families.” On the other hand, according to an analysis by Moody’s Analytics, the decision to forgive part of the debt intersects with the decision to lift the payment freeze on federal student debt since the beginning of the pandemic, which means that the impact on the economy could be very small. However, it will make a big difference for people like Torres, who will see a good part of her total financial burden lifted. For Matías Ríos, an expert in financial planning, the student relief that the government will give is correct since it reduces the monthly expenses of families with this type of debt, causing a positive impact at a time when the economy is in recession. . “The government is called upon to invest federal resources in the way that best suits the community. I cannot imagine a better way to invest resources than financing and facilitating education”, assures the expert. Watch the reactions on TikTok to the student debt forgiveness 2:08 Torres, for his part, says that he will obviously take this opportunity, although he understands the concern of those who fear a further deterioration in the national economy; However, she brings to the table an issue that she considers the main problem of all: the cost of a university education in the United States. The debt she acquired to study for her master’s degree was US$30,000. “I don’t think that the resources that have been used for my master’s degree have cost US$30,000, I think that a balance has to be made, I think that education here is very expensive, if you compare with Spain, for example, a master’s degree it can cost 2,000 or 3,000 euros”, emphasizes Torres. She’s not the only one who thinks that way. Marc Goldwein, senior director for policy at the Committee for a Responsible Federal Budget, told CNN that what’s really needed is “for college to be affordable, not to send a gift from the US.” $10,000 to people who already have, in many cases, advanced degrees.” Meanwhile, Senator Rubio has proposed eliminating interest on federal student loans, to replace them with an uncompounded amount that would be paid over the life of the loan. According to a Department of Education analysis cited by the White House, the average amount of student debt a student graduates from college with is nearly $25,000. However, for Ríos, a student loan is an investment that will return throughout her working life, which could be 20 to 30 years, so that, although it is expensive, it is necessary to see it as a long-term project, she says. . When Torres graduated, she tried to find a job in her new Digital Marketing career, but she was unsuccessful. Her lack of work experience in her branch and the need to pay her personal and family expenses played against this objective. So he decided to enter the world of sales and exports, and today he has a job that satisfies him in many aspects of his personal and professional life, despite the fact that he applies little or nothing of what he learned in his master’s degree, which is why his passing through the university is reduced to a pride of one’s own. “It is a personal satisfaction to have been in an American university, but that does not mean that she has US$30,000 in debt,” she lamented.