But the economic impact of student loan debt relief varies depending on the amount of relief provided and whom it targets. Broadly, Moody’s holds that various forms of student debt relief would act like a tax cut stimulus to economic activity, leading to a modest increase in household consumption and investment. Long term, a reduction in student loan debt could help improve the formation of small businesses and households, as well as spur an increase in homeownership.

Blanket student loan debt forgiveness would mostly benefit people who would have likely paid off their loans over the long term. The Federal Reserve Bank of New York estimated that the average monthly loan payment in 2018 was between $200 and $299.