TrendMacro conversation with Nat Malkus on student debt forgiveness, COVID learning loss and AI in the K-12 classroom

Pandemic-era forbearance on student debt repayment ends in August, locked into law by the Budget Control Act that ended the debt-ceiling crisis in May. Borrowers have up to a year to get back on full repayment schedules before penalties kick in. At full adoption, this will take money out of the economy equivalent to 0.42% of personal consumption expenditures. The distribution of borrowers is skewed to the high end, so it's not clear this will be a deadweight loss to spending -- it could, instead, come out of additions to saving. The administration plans to come back with the same debt cancellation program that was recently struck down by the Supreme Court, but using a different regulatory path better designed to pass judicial scrutiny. It will also add changes to the income-based repayment formulas that will bulk up the initiative to a value of $500 billion. It is not clear this can clear SCOTUS, and in any event will likely not begin to be implemented until after next year's presidential election. Learning loss from school shut-downs and remote learning during the pandemic and its aftermath has gotten worse, not better, suggesting that the lockdowns led to a permanently impaired learning platform in K-12 students, hitting hardest the youngest and the oldest. Teachers and their unions have no explicit program for bringing artificial intelligence into K-12 classrooms, but neither are they making any moves to block it. The biggest concern among educators is how older students will use it as an assistant in homework, on the one hand learning to use the latest tools in the digital toolbox, but on the other hand failing to learn how to research and write.