Title is a little misleading because I'm pretty sure I already the answer from this sub, but what the hell.
There's push-back from a lot of people concerning total student loan forgiveness. One big argument being, “Why shouldn't they have to pay? I did.” Another argument being, “They knew what they were getting into. They should be responsible and pay back their loan(s).”
I won't lie and say that I believe we should outright eliminate all student debt. It's more complicated than just vanishing it away for everyone. Not everyone made a good-faith effort to repay their loans even when they were able to. In some cases, their loan predicament is entire on them. Why should they be rewarded? I know that's a small percentage but how do you decide who actually needs or deserves forgiveness? While it sucks for those who need it, the distinction needs to be made. Taxpayers would be more receptive to loan forgiveness if they knew they weren't paying for “deadbeats”. Anyways, I digress. That one's a different discussion and I don't think I'm even prepared to speak on it.
To be clear: I, personally, won't fight loan forgiveness if that's what's going to happen. Good for you.
I do recognize that there are problems we need to address with the initial cost of higher education. The greater problem seems to be the interest that accrued on these loans though. I've seen plenty of anecdotal reports of people paying for years and still owing more than the original amount. That's madness. It's the only type of loan you can make minimum payments on and the balance goes up. It's also a strong counter-point to the second argument up above. It may be what you agreed to but you definitely didn't know what you were getting into. At 18(ish) you may legally be able to sign that contract but you don't truly know what it entails. Rarely would someone of that age have the foresight needed to anticipate the soul-crushing payments you'll be making in the future.
So my idea is this:
- Waive all that interest, retroactively. The government shouldn't be making money of ya'll anyways. Definitely not for education. If the total amount of your payments you've made over the years (including what was applied towards interest) covers the original loan amount, you're done. You no longer owe any money.
- Make it easier to discharge student loans in bankruptcy. Other than taxes, student loans are the only thing you can't get discharged. (Well you can, but it's so difficult and narrowly focused, you can pretty much consider it impossible.) Why are private institutions getting this protection? No other industry does. They're already making (tens? hundreds? of) millions in tuition, endowments, sports sponsorships, etc… I've seen some articles out there saying only the rich will benefit from loan forgiveness, but 1) that never made any sense to me and 2) bankruptcy protection would actually benefit those of lower income. If you can't pay, you can't pay.
Having paid what you agreed to, or having actually made an effort (in case of bankruptcy), I think this could convince some of the opposition to flip sides.
Thoughts?