Core Insights - The total student loan debt in the United States is approximately $1.8 trillion, which is a small fraction of the wealth held by the top 1% of Americans [1][4] - The wealth of the top 1% reached a record $52 trillion in Q2 2025, representing a $4 trillion increase from the previous year, sufficient to eliminate all student debt and still leave over $2 trillion [2] Economic Impact of Debt Cancellation - Immediate boost in consumer spending: Paying off student debt would provide borrowers with additional disposable income, potentially increasing GDP by 0.3% to 1% annually [6] - Reduction in wealth inequality: The top 1% might see a 3% to 4% decrease in their total wealth, while the bottom 90% would experience relief from debt but not significant wealth transfers [6] - Potential inflationary pressures: A sudden increase in spending power could lead to short-term inflation, particularly in housing and services, depending on the pace of debt cancellation [6] - Effects on credit markets: Banks and loan servicers would face a loss of future interest payments, which could tighten credit markets slightly [6]