I get a little nauseous whenever I read my student loan payment notices. Then, I hold my nose and write a check that exceeds my monthly rent payments. Then, if I really want to torture myself, I take a look at my “payment schedule” and realize that if I pay my private and federal student loans every month like I’m supposed to, that I will complete paying them off sometime around 2035.
It’s altogether possible; therefore, that we will have colonized Mars and the Cubs will have won the World Series before I complete paying for my bachelors and Masters degrees.
Unlike many western Democracies that fully subsidize the college education (those socialist pigs!) , the United States allows for students to pay for college in one of four ways. You can have wealthy parents, you can be exceptional enough to get a full ride scholarship, you can float a federal student loan from the government, or you can allow a predatory private company like Sallie Mae to finance your education. The second two options create a sobering reality for recent college graduates. More and more, children of the millennial generation are finishing their education, and being handed a bill for $100,000 or more. It’s quite the daunting tab to pick up, especially if you emerge from college and find a job making $35,000 a year or less, which is often the case.
House Democrats and President Obama are now realizing that economic mobility among today’s recent graduates is going to be further stagnated if appropriate actions are not taken. This is why it’s critically important that Congressman Hanseen Clarke (D-MI) has introduced the “Student Loan Forgiveness Act”- a bold solution to this problem that is based on a simple concept. If passed into law, this bill would create a “10/10 Loan Repayment Plan” which borrowers could optionally enter. Once enrolled in the plan borrowers would have their federal student loans forgiven if they pay the federal government 10% of their income for ten years. This number is slashed to five years if borrows work in a public service profession- such as teaching or law enforcement.
I understand that the odds of this bill passing the Tea Party controlled House of Representatives are about the same odds of Canada invading North Dakota this summer. House Republicans would probably break out in hives if their leadership made a tangible attempt at meaningful social reform. But hopefully, this legislation can focus the national dialogue on an issue that is absolutely not going anywhere.
The recent economic crisis pushed more and more people towards colleges and universities because jobs were in short supply. As a result, more and more graduates have become dependent on the Federal Government and Sallie Mae to finance their education. As more and more borrowers hit the job market, more and more of the American working class will be writing the same painful monthly checks that I write. That’s money that could be injected into the economy. Instead, it’s either disappearing into the abyss of government bureaucracy or lining the pockets of Sallie Mae, whose monopoly on the industry is so robust that Teddy Roosevelt would’ve torn them limb from limb.
It’s probably true that Republican’s aren’t exactly jazzed at the idea of allowing borrowers to get out of debt. After all, they’ve been turning a deaf ear to the national outcry to change the way we distribute our wealth. After all, the government reaps a higher percentage of taxes from the working class who might’ve been able to achieve the “Millionaire’s Tax” bracket if they weren’t saddled with such a cumbersome debt. But, this is an issue that conservatives truly ignore at their own peril. Passing the Student Loan Forgiveness Act would be inserting a long sought after piece into the student loan reform puzzle.
Personally, I think the federal government should not only embrace this proposal or a similar one, and then cut military spending by 10%, and use the money to buy out Sallie Mae and take full control over student loan financing in America. This way, our government can abolish Sallie Mae’s predatory monopoly, and work alongside young working-class Americans to find further ways to ensure that college graduates aren’t handed a mountain of debt minutes after being handed their diploma.