If loans were not forgiven, it could cause higher education to be more expensive and put a financial burden on college students because students may be less likely to pursue higher education if they know they will be burdened with large amounts of debt after graduation. This could lead to a decrease in demand for higher education, which would lead to a decrease in the supply of educational institutions, which would lead to higher prices due to the lack of competition. Additionally, if students do choose to pursue higher education, they may be forced to take on more debt in order to pay for their education, which could exacerbate the problem.
Furthermore, high levels of student loan debt could impact a graduate's ability to make major purchases such as homes or cars, which could have broader economic implications. It can also affect mental health and stress levels of graduates.
On the other hand, forgiving loans would provide relief to borrowers and free up funds that could be used for other purposes, such as investing in the economy or purchasing goods and services. This could have a positive impact on the economy overall.