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Should All Student Loan Debt Be Forgiven?

By Edited Aug 9, 2016 0 0

Student loan debt is at its highest at almost one billion. Many students who went for their degree to better their financial situations are finding themselves deeper in debt than ever. There are many groups fighting for a government "bail-out" from student debt. The argument is that the government bailed out irresponsible financial institutions and GM which did not seem to boost the economy too much. Why not bail out those who are trying their hardest to fend for themselves? Some argue that forgiving student loan debt would free borrowers to spend money on other things that would stimulate the economy. One group was started by a lawyer, Robert Applebaum. You can go to his facebook page titled "Forgive Student Loan Debt to Stimulate the Economy" and sign a petition that goes to the Obama Administration. The last time I looked, the petition had 654,587 signatures, so it's obvious that there are many people that support these views.

My Thoughts...

I personally don't think that a bail out is the answer. How much more money can the government dish out? Students took out these loans and must have considered that they would have to pay them back. Yes, the economy sucks and it's hard to find a job that pays enough to afford these high loan payments. Consider my situation: My husband and I have struggled financially from day one. I decided to go to college in my late 30's to better our situation and maybe have some hope for a retirement some day. Being married with two sons, I opted for online courses with the University of Phoenix. It's the only way I had time to go since I had a full time job and a household to run. I recently graduated with a Master's in accounting. 6 years and $100,000 later. Two years ago, I was laid off and have not been very successful in finding another job. So, here I am at the age of 43 with mountains of debt and no job. I am resigned to the fact that going back to school at such a late age was a bad choice. I also realize that I should have done some research because I would have found that online courses are very expensive. I should have paid attention to how much debt I was racking up. I made bad choices, my fault. I realize that I may never see a comfortable retirement or even live comfortably for the rest of my life. However, it was "my" bad choices and I should live with that. 

We Do Need Help

I'm not saying that I would refuse a bail out. If it comes down to that, I'll be very happy to see my student loan debt disappear. Although I don't think a bail out is the answer, I do think that we need some help. I think that one should be able to discharge student loan debt, or portions of it in bankruptcy court if one can prove that the debt is impossible to pay. I think there should be no interest accrued before the student is required to begin paying or when the loan is in forbearance or deferment. I think that schools, such as the online schools, should not be able to charge such exorbitant tuition fees. But I still don't think a full bail out is the answer.

In the Meantime...

While we all wait for the bail out, there are some things we can do to ease the burden. For instance, in January, Obama's plan to ease student debt will go into action. This plan offers a cap on federal loan payments at 10% of income and debt forgiveness after 20 years (instead of the 15%/25 year plan that was to go into effect in 2 years). It will also make it easier to consolidate loans. Students can also talk to their lenders about forbearance or deferment to reduce and/or postpone payments if economic hardship can be proved. Loans can be consolidated to reduce interest. Or, better yet...get a job in the public sector and your loans can be forgiven after 10 years! 

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