August 13, 2009
Stimulate the Economy = Forgive Student Loans!
Would Forgiving Student Loans Stimulate the Economy?
Several grass-roots groups were established on Facebook in early 2009 calling for the cancellation of all student loan debt under the theory that this will stimulate the economy.
Most noteworthy is the group Cancel Student Loan Debt to Stimulate the Economy (see also www.forgivestudentloandebt.com) founded by Robert Applebaum, a New York attorney. This group has grown to have more than 220,000 members in just seven months. Another group, Stimulate the Economy — Forgive Student Loans is running a petition drive and has collected more than 40,000 signatures.
These groups have attracted attention from news media in part because of their rapid growth. Recent coverage includes The Huffington Post (February 5, 2009), US News & World Report (March 8, 2009), BusinessWeek (March 24, 2009), Washington Times (March 30, 2009), University Business (March 2009) and USA Today (May 12, 2009).
Would Loan Forgiveness Stimulate the Economy?
Both Mr. Applebaum and Mr. Bartoy argue that canceling all outstanding student loan debt would stimulate the economy and be more effective than the American Recovery and Reinvestment Act of 2009. For example, Mr. Applebaum writes “Forgiving student loan debt would have an IMMEDIATE stimulating effect on the economy.” He argues that this would have a multiplying effect, that “tax revenues would go up, the credit markets will unfreeze and jobs will be created” and that “the fastest way to revive our ailing economy is to do something drastic to get consumers to spend”.
The Honorable Jim Sano, Chair of the Finance Committee for the Albany Common Council, has echoed these ideas in a proposed resolution calling on Congress to “offer programs to reduce student loan debt as an economic stimulus tool”. A meeting will be held on August 12, 2009 concerning the resolution.
It is an interesting idea, but would forgiving all student loan debt actually stimulate the economy?
Unfortunately, the stimulative effect of this proposal would be minimal because the annual payments on the debt amount to less than 4% of the debt. Let’s review the math:
- There’s about $598 billion of federal education loans outstanding and about $132 billion of private student loans outstanding, a total of about $730 billion.
- Only borrowers in active repayment and who are current on their loans would derive a cash flow benefit from loan forgiveness. While borrowers who are in a deferment or forbearance, delinquent or in default might derive a financial benefit from having their debt canceled, such forgiveness would not translate into increased consumer spending.
- About half of all private student loans are in repayment, and of those, about one-fifth are either delinquent or in a forbearance. So only about 40% of outstanding private student loans are in active repayment and current.
- Nearly 60% of federal education loans are in repayment, and of those, about a third are either delinquent or in a deferment or forbearance. So only about 40% of outstanding federal education loans are in active repayment and current.
- 40% of $730 billion is $292 billion.
- Most borrowers of federal education loans consolidate their loans to obtain an extended repayment, typically with a term of 20 years. Most private student loans also have a repayment term of 20 years. Assume an average interest rate of 7.0% on federal education loans and 11% on private student loans. Then the current annual payments on the education debt that is in active repayment total about $28.8 billion, 9.9% of the debt in active repayment and 3.9% of the $730 billion in outstanding debt.
So assuming that the borrowers would spend this windfall instead of saving it or using it to pay down other debt, this proposal would involve the government spending $730 billion now in order to increase consumer spending by $28 billion. Since less than 4% of the cost of this proposal would be spent by consumers in the first year, it will clearly not have the “immediate stimulating effect” claimed by the proposal’s proponents.
Forgiving All Student Loans is Poorly Targeted
Forgiving all debt provides a financial windfall to borrowers who are capable of making their monthly loan payments, such as wealthy doctors and lawyers, and not just to borrowers who are experiencing financial difficulty. There are more effective and better-targeted ways of spending taxpayer money.
Consider, for example, income-based repayment. This repayment plan, which became effective on July 1, 2009, caps monthly payments on federal student loans at 15% of discretionary income, where
discretionary income is defined as the amount by which adjusted gross income exceeds 150% of the poverty line. Borrowers with income near or under the poverty line have a zero payment. After 25 years, any remaining debt is forgiven. When used in conjunction with public service loan forgiveness, the debt is forgiven after 10 years. For most borrowers who use income-based repayment, the monthly payments will be less than 10% of gross income.
Congress enacted income-based repayment and public service loan forgiveness as part of the College Cost Reduction and Access Act of 2007 to help people who want to pursue careers in public service but who are prevented from doing so because public service jobs do not earn enough income to repay the debt. Public defenders and prosecutors often accumulate $120,000 or more in debt obtaining a law degree, but face starting salaries of about $40,000. A debt-to-income ratio of 3 or more is unsustainable and leads to high turnover in these positions. But with income-based repayment the monthly payment is cut by 3/4 to 3/5 (for this particular combination of debt and income) making it possible for public-spirited lawyers to remain in public service, and the 10-year forgiveness ensures that they are not in debt forever.
There are Better Ways of Spending Taxpayer Money
A better approach is to target the spending in a means-tested manner. Lower income students are much more likely to spend a windfall than to save it. Increasing federal need-based grants, for example, would not only help low income students enroll in college, but would also stimulate the economy because nobody saves the Pell Grant. $35 billion a year would be enough to eliminate education loans from the financial aid packages of low income students by doubling the maximum Pell Grant. Not only would that translate into an immediate spend, but it would increase the number of low income students graduating with Bachelor’s degrees by 170,000 to 320,000 a year. The increased federal income tax revenue from these graduates would pay for the cost of the increased grants in less than a decade, a pretty good return on investment.
Or if the goal is to provide relief to existing borrowers, why not roll back the changes to the bankruptcy code that prevent borrowers from discharging federal and private education loans? There is at best weak justification for the exception to discharge for private student loans. Some people might argue that federal education loans should be excepted from discharge because the federal loans provide a variety of options for relief for borrowers in financial distress, such as economic hardship deferments, death and disability discharges, extended repayment, and the new income-based repayment plan mentioned earlier. (Though the total and permanent disability discharge for federal education loans is not aligned with the definition of disability used for Social Security, preventing some disabled borrowers from getting their loans discharged.) Private student loans offer none of these consumer protections and are little different than credit cards, which are dischargeable in bankruptcy. It seems strange to lump private student loans in with taxes, luxury goods, child support, alimony, DUI, criminal fines and other nondischargeable debts. Lenders have argued that repealing the exception to discharge for private student loans would make the loans less available and increase the costs. But the loans are already less available and more expensive, and permitting bankruptcy discharge would likely increase the fees by no more than 1%. Representative Danny K. Davis proposed legislation in 2008 to allow private student loans to be discharged after five years in repayment. (Senator Richard J. Durbin proposed eliminating the exception to discharge for private student loans entirely.) This seems like a reasonable compromise, and is similar to the bankruptcy code provisions for student loans from its inception in 1978 to 1990. (The five year threshold was replaced with a seven year threshold from 1990 to 1998 when it was removed.) Unfortunately, Rep. Davis’s amendment failed in the House by a vote of 179 to 236. But perhaps the legislation could be reintroduced during the current session of Congress.
Mark Kantrowitz is a nationally recognized financial aid expert
and publisher of FinAid.org and FastWeb.com.
Tags: Financial, Money, payment, School, spending |
Comments(25)
This is a double edged sword, because if we were smart we wouldn’t have student loans in the first place (But sometimes it’s unavoidable).
However, I feel that my student loan payments are out of control! When one’s student loan payments are more per month than rent, car/insurance, and phone bill combined…
You have to remember that the person who wrote this article works for this company, Fastweb.com, and is funded by the whole student loan economy. They are already in a position to want to condemn the plan in toto without looking into other variations of the same idea.
I don’t think that student debt should be forgiven. (where would the debt go)? In space? Maybe a large portion should be heavily discounted. Life happens! I am not working in the field I graduated from. I know I borrowed the money. I made a commitment to attend school and further my education. It is an investment in myself. The money shouldn’t be borrowed if you can not or will not pay it back. If someone borrows money from you, you would want to be paid back?
With 156.3 million American taxpayers, the cost of forgiving $730 billion in education debt would cost about $4,670 per taxpayer.
MichceleJ49 – Where do you think the rest of the money from all of these large corporate bailouts is coming from? We don’t have it – and printing more is only raising inflation. Student loan forgiveness would be no different than the other bailout money that is being pulled out of thin air. The difference: its directly impacting consumers and not corporations who are still doling out large bonuses to a select few. Unfortunately, many are graduating with no jobs to be had in their field – or anywhere else. Those in rural areas are even more unlikely to find a job in another field. Relief from student loans would not only give consumers more money to spend, but it would also allow wiggle room for relocation expenses to move to where one finds a job.
There are two significant flaws with this article: lumping loans that are delinquent, in forbearance, or in deferment in the “no benefit to stimulating the economy” category, and the argument for increasing Federal need-based grants.
Delinquent loans are most likely a result of the current recession/depression; you can’t pay your loans off if you have no job. Same thing with forbearance , which is granted if one is not earning enough money or if there are extenuating circumstances (including unemployment). Since deferment only lasts while one is actively enrolled in school and for 6 months after graduating, the current economic climate means many of these deferred loans will shortly run the risk of going into forbearance or becoming delinquent because recent graduates can’t find jobs.
The justification presented for increasing Federal need-based grants is, quite simply, wrong. It depends on two things: there being enough spaces at University to accommodate 150,000 more students, and those students finding jobs once they graduate. There already exists greater demand for higher education than the Universities can meet, so how are they to accommodate an extra 150,000 students, especially when the Universities are having to cuts their budgets thanks to the recession? As for finding jobs afterwards, just how is that supposed to happen when there aren’t enough jobs to employ recent and upcoming graduates?
Forget the immediate benefit forgiving student loans would have on the economy – we have a pretty good idea of what those benefits would be. Rather, think of the long-term benefits. Banks would have more money to hand, which would free up lending between banks, thus making more funds available for mortgages and the like, while also having a positive impact on credit card interest rates. The banks would not be rewarded for their incompetence in helping create this problem in the first place, and people would not be punished for trying to better their lives and to give back to the community.
BenjaminS656
Thank you for this article. There are too many people calling for the government to “give me money now!” I have outstanding student loans, and I do not think the government should pay them off… Of course it would be nice, but I borrowed the money intending to pay it back, and I will not force someone else to pay for my education. The government does not just get their money out of the air… it comes from my pockets, and the pockets of my neighbors. I would never ask for them to pay off my loans… it doesn’t make sense… not would they willingly do it. So why do we want to force them to do it? That is not democracy.
No, student debt should not be forgiven, as much as I hate saying it. It would be no different than canceling say your mortgage or car loan.If higher education in the US was actually free only the brightest would be admitted to college but now everyone goes, provided they can get money from somewhere and that’s why there is devaluation of higher education, and that’s why college grads can’t get decent jobs. The smartest students get scholarships now and loan forgiveness would not benefit them as much as those who probably should have thought twice before enrolling.
Mark, I take issue with quite a bit of your logic, but this is the statement you’ve made which I think is the most outrageous. “Lower income students are much more likely to spend a windfall than to save it. Increasing federal need-based grants, for example, would not only help low income students enroll in college, but would also stimulate the economy because nobody saves the Pell Grant. $35 billion a year would be enough to eliminate education loans from the financial aid packages of low income students by doubling the maximum Pell Grant. Not only would that translate into an immediate spend, but it would increase the number of low income students graduating with Bachelor’s degrees by 170,000 to 320,000 a year.”
Here’s why I think you’ve missed the boat: doubling the max Pell grant would not be enough to “eliminate” the need for student loans in financial aid packages, AND it would only translate into an immediate spend at the least expensive colleges (community colleges and state universities). Or perhaps you meant that handing 100% of the Pell grant over to colleges still counts as spending… but I doubt it.
Given that the max Pell grant is currently $5,350, doubling it would amount to $10,700. Would a $10,700 grant eliminate the need for student loans? Not necessarily, and certainly not 100% of the time, even in low income students. Why? School costs – particularly costs at private universities. This sort of policy would would asymmetrically affect the population you are targeting, to put it nicely. Stated another way, it would punish low-income students who are smart enough to be accepted to expensive but prestigious private institutions. Or, to project into the future, this policy might be seen as relegating low income individuals to low-cost public institutions.
In fairness, at universities with tuitions less than $9000/year (56% of students according to collegeboard.com), the doubled max Pell grant would have spillover effects. I feel confident that it would largely be spent on things like supplies – whick frequently add up to over $1000 per year – and housing costs – typically between $7,000 and $10,000 per year – which the students have to pay anyway, and would have paid with loans instead of grant money. The spillover from the max Pell grant, as I see it, isn’t likely to stimulate anything, but might keep students’ heads above water while they pay the mandatory costs of college and maintain the status quo, and graduate with less debt. And yes, graduating with less debt would be a positive thing.
Mark, one quick question for you though, since you’re so good with numbers. How much did ALL of the other bailouts combined cost, per taxpayer? Ok, two questions. Can you please provide me with your personal understanding of parity? Thanks!
What are we Vulcans? This article has no feeling. It does not even consider how a person would feel if they no longer had to pay their loans. Have you considered how grateful people would be? The weight off their shoulders? Debt is like cancer because it makes you feel sick sometimes knowing you have it and sometimes can’t see the light! Now I am sure everyone intended to pay it back, I did in full as well! But if it were gone, think how much quicker people can start living the life their education promised them in the first place! Unfortunately, feelings go nowhere in society, but numbers do. Thanks for the numbers Mark.
Here is what I think should be done. I do think it is an excellent idea but I do think those people should do something to give back. There are many non-profits out there that are desparate for volunteers to help. A Lawyer could help the non-profit with some of the legal issues that come up. A dr could volunteer his time helping people the frequent the medical clinic. A veternarian could volunteer at a animal shelter taking care of the animals that need it. Etc…Etc…Etc..
When a person volutneers they can submit the monthly time and a reduction is taken in student loans. Say they volunteer 20 hours a month. There can be some math done and they have a reduced payment.
I really don’t think people should get the student loans dropped free & clear. They should do something for those that can’t in order to get that luxury.
I’m all for trading volunteer hours towards reducing student loan debt. I have $60,000ish in student loan debt because when I went to college I was an abused child and had to use loans (trust me, I got plenty of grants and scholarships too, but my loans paid my rent, car payment, car insurance, food, etc. as well) because I had NO parental assistance. I did work a part time job as well, but taxes on a single person depleted a good chunk of my income, plus the cost of medical bills (unfortunately I had a cancer scare as an uninsured person), other incidentals…
Anyway, I would be appaled if my student loans were just flat out cancelled. I’d gladly work the money off though.
I worked very hard while attending a local college in order pay my own way through college. I think forgiving student loans would be a slap in the face of responsible individuals who worked hard and paid their way through college or worked hard to pay off thier student loans. Why should individuals who chose not to work while in college or attend a school or career outside of thier means be rewarded? I am so tired of individuals in society believing they deserve some kind of handout. What ever happened to working hard for what you have and taking pride in being able to accomplish things on your own?
I think it would be wonderful to have the debt forgiven. I, as many many others are forced into a terrible situation; our parents make too much money for the federal government to give me a grant but we are not seeing a dime of there income coupled with our departments being too poor to provide scholarships even though we work night and day too get a high GPA.
I am not sure if forgiving student loans completely is the way to go, (though I would not mind) but I think a serious consideration should be taken with FAFSA. They need to realize that I, like many moved out at 18 and have been having to work a 30-40 hour week while taking 18 credits to stay afloat. I am not an Econ major but even I know that this is conducive to a healthy economy.
I really don’t expect to have college loans forgiven, but I feel that we should only have to pay back exactly what we borrowed. I know some people who are paying about $60,000 for a $30,000 loan. Why are they charging us interest that is more than what we borrowed for school?
I think there is a way for all sides to win at this, both the borrower and the lender. Why not do what every other credit card company has done since the dawn of time. Offer your student loans to go to school so those who cannot afford the cost of higher education can still attend. Those that go to school and borrow the money NEED to pay it back, our society has become not that of the hard worker, but instead the handout. The student loans i’m proposing should be similar to credit cards in the aspect that it should be INTEREST FREE for 20 years. Over the life of the loan you would save 2/3 or 66% of what you would repay in interest.
With Amercian Students being forced into enormous debt simply for an education…upon graduation they are compelled to take possibly a substandard job and remain at it in order to meet the loans and just provide income for normal living expenses….I would say…Yes. Once in a “job” the liklelyhood of making any demands or raise questions of dissent are at almost zero because in almost every aspect of the word you have become a “slave”. You are a slave to the debt, the cost of living, and the capitolistic economy. Any creativity or hopes to make a “change” are soon dashed and you join the ranks of the demoralized, hopeless drones that inhabit the United States as a whole today. It has gotten to the point, “why bother” on higher education? I have been on both sides of the coin where I paid myself and where I borrowed money. As for AliciaK19 I am so glad life is so simplistic. After a 31 year marriage my husband walked out leaving me with absolutely nothing. I struggled to find a place to live and to go back to college in order to make a decent living, here is the catch…I’m 50 and I suffereing from a myriad of illnesses. So be careful who you accuse of getting “hand outs”. Some people work very hard and still need assistance…It must be wonderful to be so great. As for the economy that’s a no brainer. Look at Germany for example…health care and education….they are thriving…are we?
I think canceling student loans would be great for the economy because that’s what the almighty did in bible times when they were under the mosaic law. Although we’re no longer under the mosaic law following its principles would help us. There was a year of restoration called the Jubilee that happened every 50th year. This law is in Leviticus 25:10. In the beginning of the Jubilee, all debts were canceled. The land was returned to its owner with out charge, and if one was enslaved he was permanently free from this servitude. This kept the economy in perfect balance. It also prevented the growth of extremely rich and poor classes. Inflation was prevented. Land values remained stable as did wages. Imagine having that for a year everywhere in the world if applying this principle. What if this was enforced by the president? It would be a dream come true. The economy would be restored. Since everyone is greedy its not going to happen unless everyone applies this principle. God cared for his people then and he can now if we follow his principles. So yes I do think canceling student loans would boost the economy.
I think this just adds to the get something for free mentality America has today. I have a lot of Student loan debt and would LOVE to have it forgiven. But how is that fair? How is it fair to all those that worked hard and paid thier debt? I received an education in exchange for my loans. I rightfully owe them to to “get out” of it is stealing. Now I do feel interest needs to get in check. Loan interest should not be excessive.
I just don’t believe that student loan debt should be forgiven free and clear. I think people need to do something in order to reduce that debt. I have student loan debt and could use the relief but I also volunteer my sparetime and see how much non-profits struggle to get volunteers. People don’t want to do something if they are not getting something in return. Doing the volunteer work in order to reduce debt will help both the non-profit and the person who is doing the work.
While borrowers who are in a deferment or forbearance, delinquent or in default might derive a financial benefit from having their debt canceled, such forgiveness would not translate into increased consumer spending.
BS! If my student loan debt (70K original from undergrad and grad school, 35K in INTEREST ADDED OVERNIGHT WHEN I WENT INTO DEFAULT (b/c i recieved bad information, the wrong forms, and was unemployed) was cancelled, I would put that money back into the economy, i.e. possibly buying or building a house – as it is, i can never do that, and any “disposable” income i make FOR THE REST OF MY LIFE has to go to pay these loans. And this wouldn’t just be for this month, or this year, but the next 30 years. And i might actually have the opportunity to feel like an autonomous human being again.
Unfortunately, the stimulative effect of this proposal would be minimal because the annual payments on the debt amount to less than 4% of the debt
PAYMENTS ARE ONLY 4% of the debt b/c of the way the debts are structured and because most people with substantial student loans cannot pay them back in lump sums. Quite often, my creditors call and say ” So would you like to put that (100K debt) on a credit card and finish it off today? My answer, ARE YOU ON CRACK?
Nearly 60% of federal education loans are in repayment, and of those, about a third are either delinquent or in a deferment or forbearance. So only about 40% of outstanding federal education loans are in active repayment and current.
OBVIOUSLY VERY FEW PEOPLE ARE CURRENTLY ABLE TO PAY BACK THEIR LOANS ON TIME.
In answer to those who say we should all pay back our student loans (and how many of those people crying wolf and you should pay them back actually HAVE student loans, did your parents cover everything?), I am not averse to paying a portion back, or even all, IF I WERE ABLE TO. I make less than 20K a year (and have only gone above that once, i am almost 40). So i probably did study the wrong thing – should have gone to med school, but then i’d have even more debt, and probably wouldn’t be able to pay it back either. After ten years of abject poverty in what should have been the prime of my life, my health is deteriorating. I can not work 3 jobs the way i did when i was 24 (and 28, and 32). I just can’t. I am tired of having to justify the desire for a decent quality of life just because i took out some loans to try to pay for college. If my parents had been able to pay for my college outright, i might still have the energy to be righteous about people paying back their student loans. I am tired of feeling like i have to sacrifice my health and my sanity for these loans.
If Sallie Mae can go bankrupt, (which was a big supporter of the usury of student loans), why not forgive some of the debt acquired by students? I would love to go back to school (which Obama wants us all to do), but i literally CANT b/c of my student loans. And getting a professional degree is the only way i will ever reach it to a higher income bracket. Hence, the only way i can pay off my student loans.
After reading the comments, I believe that this should not and would not be a handout. If you receive assistance, you give it back. I worked my ass off, upto 60 hrs a week, while going full time and I still needed a few loans cause it was only me paying for my school. Granted I did go to a competitive private school. Before some holier-than-though response: reality check! State schools in my area cost the same as private, but its not the same nation wide. Also there should be some kind of oversite to what kind of financial information students are getting from their schools. Some schools out-right lie about affordability.
Back to giving back: How many schools could use afterschool volunteers to run art, music and sports programs? I know alot, I help at two, year round. How many non-profits need legal help? Administrative help? Websites to be put up and maintained, documents to be preserved. I think this would be a good initiative to bring back a sense of community that we have all lost.
Yes America is about the boot-strap lifting, but the last time I checked, when that phrase was coined there was family and community to catch you and help, not provide for you, if you stumbled.
I think that this is a good topic for debate. It makes one wonder if the benefit of higher education is marketing or reality.
I have student loans, which are being paid back. I locked in an interest rate that I thought was competative, as I was raised on Reaganomics and never say interest rates go down. Is it painful? From a fiscal standpoint, the benefits are not as immediate as scoring a $100K job right after graduation depending on the field of study or job availability. If I was just dealing with my own circumstances, things would be at least tolerable. However, don’t ever think that a divorce finalizes anything related to this subject matter.
My ex defaulted on student loans, but DOE did not try to collect for 15 years from the time he quit attending class. He has stayed intentionally under employed or unemployed for more than a decade, which leaves the loans in perpetual default. His idea of “paying” his student loans is having his IRS return garnished, termed “I make a payment once a year” the year we filed together. Any garnishment for child support arrearage will never appear because of penalities and interest on defaulted student loans. Therefore, whatever advise was given in the financial aid office or higher education classes did not phase him as he is not a fiscally responsible person.
Do I want his student loans, which are currently on more than a 20 year “pay schedule”, cancelled? Sure! Perhaps it is the only way our child will see the arrearages paid before the child is eighteen.
Do I think that he should have been allowed to take them out in the first place? Definately, NO because his mother was making all of this living and academic payments. This was just party money to him.
There needs to be more stringent rules about returning student loans to the government rather than the student if the academic expenses are paid in full from a different funding stream during the semester. You bet!
Amen, Alexandra. I had no idea they tack on “up to 50% interest”. I do have some student loans and I know I will incur more loans. I am returning to school; I almost finished in the 70’s but life intervened and I did not finish. I have 2-3 years to finish this other degree I am working on, and I know I will have loans to repay.
Later in life, when we are returning to school, it can be even more difficult to repay loans. So… you see these ads on the internet everywhere how “Obama Wants Moms To Return To School” as if that is going to make people want to jump up and run to school! Bull. If he so desperately wants moms/dads/the nation to return to school, he’d better open his big wallets and **fund** it for us. I will work toward paying these loans, yes, but I have no pie-in-the-sky notion that I will be able to pay it all off, unless I am able to pay large chunks at a time. And, I won’t be able to do that unless employers are willing to take an older adult as a “newbie” and take me under their wing to learn the new position for which my education will then qualify me to hold. That in itself is a dying breed–people hiring older workers except to allow them a job maybe as a WalMart greeter–and thereby shooting in the foot the notion that “returning to school” will stimulate the economy.
The student loans we will all incur from so doing will not help America’s financial growth; however, ***IF*** the government, who is so very willing to put their sticky hands in our families’ educations, will ***forgive*** most of the thousands of student loan dollars, there may be economic turnaround, for **then** people will perhaps have money to spend…ability to purchase a home rather than eake out an existence…and we can possibly see a turnaround, but even if all those criteria are met, we will not see sufficient turnaround until at least 5 and probably more like 10 years down the road.
Alexandra, I know what you mean–I could never purchase a home with the debt I now have incurred in some student loans, for my loan-to-income ratio is wayyyyy too high. There could indeed be benefit from student loan forgiveness.
It is amazing to think of all of our well educated graduates and undergrads posting on this forum, they have all received schooling in some sort of a higher education facility, whether private, non-profit, or otherwise, yet so many seem to have missed the basics of spelling. I wonder why we should forgive irresponsibility, especially for those who have not made an improvement to college level English?
The entire debate is essentially focused on whether our government, the government of the people, for the people, is practicing fiscal responsibility. The answer is, without question, NO.
Am I stating that it is Republican or Democrat caused problem? NO. It is a Republican AND Democrat caused problem. We as American citizens have lost our desire to hold our representatives accountable for their actions and choices. We have the power of the vote. Yet so many of us desire to have free hand-outs while giving away our personal freedoms and choices.
At what cost could we have our loans forgiven? How much more control of the details of our lives would our politicians gain? When would it stop?
Each of us ought to be responsible for our own actions and held accountable to the laws of our land. I am by no means perfect, but I do intend to fulfill my responsibilities until the day that I die.
We ought to vote out our current leaders and vote in a true representative body of leaders. Those who are not primarily lawyers, but for each group of citizens, whether local, state, or national, we should elect officials who are employed as the bodies they represent. For example, if a district is 90% farmers then the representatives from that district should be farmers. If the district is 50% farmers, 30% factory workers, and 20% lawyers then we should have an elected body respective to its constituents. If this were the case, we would have laws and standards which were reflective and representative of the entire population, not a small fraction thereof.
But as it stands, we should not continue to turn our country into a socialist country. We need to be inventive, creative and motivated to continue to develop new products and manufacture them, not selling licenses overseas and buying back the product at a higher cost.
It all starts in your own personal affairs. You yourself need to be fiscally responsible while holding those around you responsible as well. If you have a loan, pay it back. Do not rely on government to fix problems that you caused.