Student Loan Debt Forgiveness

I have TWO friends in their mid-40s who are still paying off their student loans – halfway through their lives. America needs to invest in education. Forgiving student loan debt would have an immediate and profound effect on the economy.

MoveOn:

Forgiving the student loan debt of all Americans will have an immediate stimulative effect on our economy. With the stroke of the President's pen, millions of Americans would suddenly have hundreds, or in some cases, thousands of extra dollars in their pockets each and every month to spend on ailing sectors of the economy.

As consumer spending increases, businesses will begin to hire, jobs will be created, and a new era of innovation, entrepreneurship, and prosperity will be ushered in for all. A rising tide does, in fact, lift all boats—forgiving student loan debt, rather than tax cuts for corporations, millionaires and billionaires, has a MUCH greater chance of helping to raise that tide in a MUCH shorter time-frame.

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Want a Real Economic Stimulus and Jobs Plan? Forgive Student Loan Debt!
I just signed a petition to The United States House of Representatives, The United States Senate and President Barack Obama: Forgiving the student loan debt of all Americans will have an immediate sti…

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17 thoughts on “Student Loan Debt Forgiveness

  1. Bob Kramer

    I am not sure that a broad stroke approach is the right way to go on this issue…though I may be wrong. I think that it should be based on a persons financial situation whether or not they can have this debt removed or lowered. I feel that there are people who can in fact make their student loan payments just fine but will obviously take advantage of this "gift".

    Now what they ought to do is allow student loans and other Federal Liens allowed in a chapt. 11 bk. If someone is having a horrible time making ends meet and qualifies for a bk then throw that debt in.

    Same thing with deficiency judgments. The rich (who have attorneys on retainer) can afford their house payments but from a financial point of view if they are upside down it is best to walk away. THOSE people should be ordered to pay the judgments.

    We need a targeted approach to debt forgiveness…but that is just my opinion.

  2. Bob Rebach

    I tend to agree with Bob (no, we Bobs don't all think a like). I can see forgiving debt to recent grads, say those who have graduated in the past 10 years, and those whose debt is out of whack with their income, but to forgive debt to everyone with a student loan is really not the solution to the financial crisis.

  3. Bob Kramer

    To add, I think those that have huge medical bills should get some assistance! One little spat with cancer and no insurance and you can have bills over 100k quickly.

  4. Scot Hacker

    Bob and Bob – Seems like a slippery slope. How do we go about determining who is worthy? And who will decide? There would be so many variables and extenuating circumstances, it would get messy. I see this differently. Investment in education is investment in America. More education equals less crime, better jobs, and better opportunities for America on the world stage. We could easily afford it – or we could have – the cost of the past decade's wars would probably cover it 10x over.

    It shouldn't be considered "radical" to suggest that we could have state-sponsored higher education. We sponsor K-12 … why not college too? It's good for everyone.

    The one distinction I can see is between private and public universities – maybe we could forgive debt for those who attend or attended public institutions.

  5. Bob Kramer

    The California State University system is subsidized…as are many states….if you are a resident of that state. Granted, it's still expensive.

    Not to get off on a tangent but Colleges and Universities are for profit companies and in many cases highly overrated….and students are "encouraged" to get into debt (student loans and credit cards). That way, they will be slaves to that debt for the rest of their lives. It's the American way. And yes, the banks are behind it.

    Sorry to get off topic…it happens ;) Maybe have a tiered forgiveness system? All they'd have to do is go off tax returns for the most part.

    Personally, I think healthcare is a more expensive problem right now.

  6. Scot Hacker

    Subsidized yes, but the percentage of tuition paid by taxpayers in the UC system has steadily diminished over time as America has been re-programmed to consider socialism a dirty word.

    You're not going off on a tangent – you're exactly on target. Students are encouraged to go into debt, exactly right. What's wrong with this picture?

    Yes, healthcare is a bigger problem, but all of these issues need to be addressed – we can't just do one at the expense of the others. Forgiving loan debt now would mean a huge cash infusion into the economy.

  7. Bob Kramer

    Agreed Scot! But here's the biggest problem that I see. Banks ultimately own that debt and much of it is guaranteed/insured by the govt. That means the tax payers somehow end up paying this student loan debt. Congress as it stands will never pass this, nor does the American people want to pay. My guess is if bonuses to bank execs were cut in half just one year it could make a pretty big dent in that student debt. Again, that is not going to happen because we are all insignificant in their eyes….except when it comes to taking our money.

  8. Scot Hacker

    You're depressingly right – there's no way congress would vote for this, without a massive sea change in American values. Maybe if this #ows thing takes off we'll see thinking start to change, but it's not very promising.

    Tilting at windmills for a better tomorrow.

  9. Chris Norman

    Anyone who's student loan is erased should lose their degree or have their transcript cleared until they pay for the classes. If it was a house, they wouldn't be allowed to keep it. A degree is not a right and not the same as an education. You can go to the library and learn all you want. You can't avoid paying for services rendered and keep the benefits.

  10. Chris Norman

    That's not really the point and not what a said, but bear with me.

    I said a degree is not a right. You have prove you deserve it and it must come from an institution that accredits that you meet an acceptable level of knowledge in your chosen field.

    To argue for wiping out student loan debt is to effectively argue to allow a small group of people to retroactively void a contract (no matter how bad it was) for services rendered with no consequences and having the other party (or taxpayers) bearing the brunt of the ill consequences.

    It would be, in effect, a gigantic theft of services.

    What about the colleges, will the lenders be allowed to sue them so they are made whole?

    And will the Universities, assuming for a moment they were required to return the monies from the breached contract, allow the person to keep their degree even though they have not paid for it?

    How are those who've already paid their student loans to be compensated?

    What about those who have defaulted on their loans and have lowered credit scores? Should they be compensated above and beyond the loans?

    As far as education as a right, we have to define if we're talking about a formal education or not. You can go to the library and educate yourself in a disciplined way. That's taxpayer subsidized, if you want to go that way.

    Overall, it's beneficial for citizens to receive an education enables them to make intelligent, reasonable decisions about self determination, responsibility, and generalize contributions to their fellow man.

    By that same logic, it's benefits us, as a country and mankind in general, for more people to receive higher education. That's a good investment.

    However, that mixes two wildly different moral arguments to achieve a faux equivalency (one being education and one being debt forgiveness).

    They are two wholly different issues, the latter being a legal, financial, ethical, and moral.

    I am not against having a higher education education paid for for everyone who wants it. However, we risk bringing the controls and regulations to any institution where these students would go. Likely, IMHO, many universities would remain private learning institutions.

    Defining something as a right has certain ramifications.

    First, I don't have a degree, so maybe I'm using words incorrectly or am incapable of articulating what I perceive the chasm of right and wrong with this in way that illustrates why it cannot be considered a justifiable action in the realm of "education is a right".

    I grew up on a farm and we were never very wealthy. My parents tried to put me through school and I did horribly. I went back when I'd matured and considered student loans. After reading it I considered it way too complex and risky to agree to. I worked to pay my way for a little bit but did ok in IT without a degree.

    So I'm coming from someone who only, at this point my life, could actually afford to get a degree. I find it entirely offensive that someone would could sign a contract and just get out of it when many, many other people in the same circumstances did not conclude that they deserved such a dramatic exception.

    This isn't a matter of a right to an accredited, certified education from a learning institution.

    Is education a right? I'm not 100% sure, but I believe all people have a right to learn what ever they want, and to any level they wish. That, I believe, is a right.

    But to my point.

    In my opinion, it is immoral and unfair to expect to maintain possession of the benefits of a legal binding agreement while simultaneously demanding relief of the reciprocal obligations. I find it akin to thievery.

  11. Chris Norman

    We're not going to agree, Scot. And you're not going to pivot the argument to be about the benefits of higher education to the nation as a whole; and how this is the same a retroactively paying for higher education.

    Answer my question about commercial property yes or no. If you cannot – then you don't want to or are incapable of grasping my point – either way; I'm done with it.

  12. Chris Norman

    We're not going to agree, Scot. And you're not going to pivot the argument to be about the benefits of higher education to the nation as a whole; and how this is the same a retroactively paying for higher education.

    Answer my question about commercial property yes or no. If you cannot – then you don't want to or are incapable of grasping my point – either way; I'm done with it.

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