July 14, 2019

My Student Loans are Sorry – Please Forgive Them!

With another election year upon us, the politicians are doing what politicians do and we all need to be paying attention. One of the greatest gifts that we can give ourselves is to be informed – about everything or as much as possible so that we can all live in and make contributions to a world that is increasingly improving. So many people don’t pay attention to politics and I’d imagine that those people don’t realize the impact of politics in their everyday lives – healthcare, education, finances.

Two politicians – Senator Bernie Sanders and Senator Elizabeth Warren have caught many people’s attention with their proposals for student loan forgiveness.  So many Americans are buried in student loan debt. While it has been indicated that the average college graduate may have about $40,000 in debt, a significant number of individuals have student loan debt that is in the $200,000s and $300,000s and even more. Many of these individuals’ monthly salary is less than the minimum monthly payment on their student loans. Try as they may to get income-based repayment or deferment or forbearance, these student loans haunt those who cannot afford life at their expense. Many times, hard-working people suffer with ruined credit and are forced to reduce their socio-economic status and thus making education – the one thing that they were taught would get them ahead – the reason that they are falling behind.  Let’s think about it for a moment, this country has very willing to give all these teens and twenty-somethings tens and hundreds of thousands of dollars in student loans before they even have an actual job but won’t give a $200,000 or $300,000 home mortgage to most without a serious application process and underwriting procedure that involves financial and credit checks to determine worthiness.

Both Sanders’ and Warren’s plan, while both addressing the need to do something about the student loan crisis in this country, are very different. To begin, Sanders is seeking to cancel all student loan debt to the tune of about 1.6 trillion dollars. On the other hand, Warren would like to cancel $50,000 of student loan debt for everyone earning up to $100,000 and then have a gradually reduced benefit for individuals who earn between $100,000 and $250,000. Under Warren’s plan, individuals earning more than $250,000 would not be eligible to receive any benefit.  Sanders’ plan would be paid for by taxing the stock market trades, while Warren’s plan would require an increased tax on the “super-rich.” Warren’s plan for increased taxes would raise more than enough to forgive all of the student loan debt but that is not her plan.

The cost of education is definitely not what it used to be and instead of treating it as a way for individuals to make a better life, many institutions have jacked up costs and turned it into big business for themselves while the job market and opportunities available on the other side of that degree oftentimes don’t provide the return on investment expected by the student. Forgiveness of student loans makes sense – the more the better. And after we forgive the student loans, let’s change the way we do education in this country. Everyone wants to get ahead and make a great life for themselves and their family. If this country could bail out the financial and auto industries in 2008 through the Emergency Economic Stabilization Act, allowing up to $700 billion to address that financial crisis, then we can bail out people who were attempting to invest in their futures through education.

We're still a long way out from either of these proposals coming to life. One of the two Senators still would need to win the Democratic primary election and then go on and win the Presidency and then, of course get the law passed. 

​Keeping hope alive!