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 receive $ 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 for rent, utilities, and your car loan for a month. But having up to $ 50,000 in debt canceled could open the door to financial freedom for the 42 million Americans facing student loans.
If President-elect Joe Biden keeps his promise to send $ 2,000 stimulus checks to Americans “immediately” upon taking office, however, those with student loan debt may not have a choice. $ 2000 in cash now or tens of thousands of dollars. in loan remission.
What does one have to do with the other?
First, paying off student 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 the hands of more people.
The proposed stimulus checks could be part of The Heroes Act, a stimulus package that was stopped by Republicans in Congress last year. The act also included $ 1 trillion in state and local aid.
States could, in theory, use this aid to distribute and administer COVID-19 vaccines faster and more efficiently. Giving more people immunity to the virus could help jumpstart the U.S. economy better than any aid program, but states are currently struggling. The Centers for Disease Control and Prevention said more than 70% of our vaccines have still not been used.
When it comes to more coronavirus aid – for businesses, states, and individuals – or student loan debt forgiveness, we face a classic case of the good of the many who prevail. on the needs of the few. Even if the few, in this situation, total 42 million Americans facing student debt that they may never pay off.
Of course, a compromise is possible. Biden could choose to write off up to $ 10,000 in student debt per person, or cap income on debt cancellation and continue handing out stimulus checks.
But amid negotiations for another coronavirus stimulus package and vaccine delivery issues, student loan debt cancellation could be filed in favor of more immediate concerns.
More from GOBankingRates:
This article was originally published on GOBankingRates.com: Why is a $ 2,000 stimulus good for you – unless you have student loans