Forgiving student debt? Bad idea.
Click here to listen to the broadcast of You Tell Me on KTBB AM & FM, Friday, Oct. 14, 2011.
Of the demands being made by the Occupy Wall Street protesters, high on the list is the demand that all federally-guaranteed student loans be forgiven. That would be the second worst idea ever floated, right behind the bad idea of offering federally-guaranteed student loans in the first place.
At over $1 trillion, total student debt in the United States now tops total credit card debt. Under legislation signed by President Obama, the federal government is now, for all practical purposes, the monopoly supplier of student loans.
Every student loan made widens the deficit. Plunging the U.S. Treasury deeper into debt for the purpose of saddling a 21-year old with debt is a compound felony. As many recent graduates are now learning, a costly degree from an expensive private university paid for with borrowed money is not turning out to be such a good deal. Many of these debt-laden graduates will never get the money they paid out of their degrees.
All will find buying cars, buying houses and starting families complicated by the presence of huge debt overhangs on their personal balance sheets. And perversely, what is the biggest driver of the explosion in tuition costs that necessitates such scandalous borrowing? You guessed it. The near universal availability of student debt.
Forgiving student debt? It’s never going to happen. Getting the government out of the student debt business? That’s a great idea.
Forgive it? Like Hell! The unconstitutional student debt was entered into like any other contract. With full disclosure and voluntarily. No promises of being employed in the exotic field of study they chose. Fully knowing that they would have to pay for it, and will very little “shopping around”(if you will) on their part in order to obtain the best bang for the buck. It is bad enough we allowed this travisty to happen, but some colleges took advantage (go figure) and raised the rates to benefit from the program.
Nope, I cannot support not paying it back. When I borrow money for my house or car, I have to pay it back or suffer the conscequences. Welcome to the real world kiddies.
NO to forgiving student loans – YES to doubling the interest on the loans these protesters have (the extra interest would be used to defray some of the cost of the damage they have done to property while “peacefully” protesting) – these prostesters are just a bunch of thugs who are either too lazy to work or living on welfare or just want a hand out/freebie but are not willing to put forth the effort to get a job but would rather STEAL/TAKE from the ones who had the “gumption” to make money – ALL freebies need to be suspended until/unless these protesters go home and stop their protesting – WE THE PEOPLE should demand they be arrested/fined for blocking traffice (brooklyn bridge)and for proptery dmange, but NOT rewarded in any way and NO forgiveness for student loans
once again you have given WE THE PEOPLE an opportunity to express our concerns/views on a topic that needs addressing. Keep up the good work, as we always enjoy your program and you seem to make a lot of sense in a “world seemingly going mad” at times –
katt, john, jim, joe, jo, lois, chris, kris, scott, judy, jewel, et al (about 20 of us get together a few times a month to discuss what is happening in the world and to “draft” letters with our opinions to congress – and we know full well they do not care
katt and friends
In a world as we USED to know it, if you wanted an education, you found a way to get one if your parents could not afford to pay for one by either working and putting yourself through or getting a student loan. A contract was signed and expected to be paid back. This is a part of adulthood, learning responsibility.
When obama, in all his wisdom, deemed the government the only source of student loans, does one need to wonder why? When you hold the purse strings, you weld power over those who partake of your generosity. Even more power when you “forgive” said loans.
One thing I have learned in life, NOTHING is free!
The government should not be in the student loan business in the first place. Forgiving them to pressure the person to do your bidding…working where the government sees fit for so many years in order to “forgive” said loans, is just another way of manipulating people’s lives. Like I said, NOTHING in life is free. Some freebies can be quite costly!
Correct. There’s no way federal government student loans can/should be forgiven. The federal government–government at any level–should never have gotten into student loans. Government has promised vastly more than can be delivered and now we are paying the piper. The dopes at Occupy Wall Street don’t have a clue.
I think forgiving student loans is a fantastic idea. We wouldn’t be in this situation if education was free (as it should be). The fact that we have to pay for education at all is shameful. I have a full time professional job (as does my husband) and a graduate degree and at almost 40 years old, I’m still paying off undergrad student loans. And don’t give me that crap about “don’t borrow if you can’t afford to pay”. That is the definition of class warfare: only the wealthy have the privilege of education? Please.
Oh and by the way? The OWS Movement rocks and is supported by EVERYONE I know, from my retired parents all the way down to my college-aged nieces and nephews. Power to the people, my friends, power to the people.
I am the disabled, widowed, college graduate student with a masters degree in education. Student loan interest rates for some grads are outrageous! Why should there interest rates be locked for the life of the loan? The college grads are paying the price twice over for our economy. First well paying jobs are scarce in these bad economic times and many are not able to make end meet. Special refinancing helped some homeowners to be able to get low interest rates. Why can we not extend this to ALL student loans well? My daughter has a 30 year fixed consolidated student loan at over 7% interest!!! A home loan today can be in the 2-3% range!!! My daughter has a full time teaching job, no car, and she still can not afford the full payment on her student loan! She lives in a tiny very run down apt in NYC. Her husband owes student loan debt as well and he can only afford to pay small portion of his student loan dept. Since he has a student loan backed by the federal govermant he has the same interest rate problem. He can not get a job in his field of teaching because of the hiring freeze. He had to take a lower paying job! We helped the banks so why can we not help our youth? We should also allow them to file bankruptcy like the homeowners who are in over there head. They at least can keep thier homes and move on. We are punishing students by keeping them so locked in and with way to make things better.
Julie. The quick answer to your question as to why student loan rates cannot be as low as home mortgage rates is because student loans are unsecured. There is nothing for the lender to repossess if a student loan borrower doesn’t pay the loan back. If a homeowner defaults on a mortgage, the mortgage lender can foreclose on the property and sell it to recoup the money that was lent. Absent that security against default, the cost of default has to be priced in to the interest rate paid by student loan borrowers. And, as I said in my piece, the near universal availability of student loan debt is perhaps the biggest single driver of the spiraling cost of a college education. You can be assured that if immediate out-of-pocket money had to be paid to the college registrar at the time of enrollment, instead of the off-in-the-future money of a student loan, the resulting consumer price sensitivity would have a dramatic impact on what colleges and universities charge. — Paul L. Gleiser