A Novel Answer to Student Debt
Our country has always strived for more. We have always pushed ourselves to be better, and do better. That is an American constant that continues to this day, our entrepreneurial spirit drives generation after generation to pursue education that builds on the knowledge of those who came before. However, over the last 20 years education has become unaffordable, and predatory lending has saddled a generation with inescapable student loan debt. Today 42.7 million Americans have outstanding federal student loan debt. With average monthly payments in excess of $500.
While these borrowers drown in interest, they are not investing in their communities. They are not shopping at local stores, eating at local bars and restaurants, going to the theater, or buying or remodeling a home. The economic squeeze that is being put on a tenth of the population is driving the economy down, stranging small town businesses and making them compete with the economies of scale that Walmart and Amazon offer. With every passing year this crisis stands to only widen the wealth gap, and leave open the opportunity for the wealthy to hoard more wealth, buy more property, and suffocate the middle class further.
There are answers however, and unlike my allies in the Democratic party who want to forgive student loans in bulk. I do believe that we should not expect our neighbors to pay for our naivety, and in some ways our negligence. But, I also believe that this crisis is equally costing our neighbors as they lose their jobs due to shortened demand; pay higher housing costs as big firms swoop in to buy residential property; and ultimately suffer the adverse effects of a shrinking local economy.
That is why I believe the only way forward is to forgive the outstanding interest on all federal student loans; and forgive the entire balance of loans in excess of 30 years and those in excess of 5 years but under $15,000. This selective approach still expects borrowers to pay on their principal balance, but alleviates the economic burden of interest to encourage long-term financial planning, and investment. The reason I believe that some select borrowers should have their entire balance forgiven is based on the assumption that had they not been expected to pay interest, their account would already be paid in full.
Under my plan we would permanently eliminate interest on federal student loans, and completely envision the way we both award and think about student loans. Student loans are an investment in the future of the country, while it is justifiable to expect students to pay back the loan, it is criminal to expect to profit on the poor and middle class students who rely on student loans. While interest, in its nature, pays dividends over the course of decades; economic mobility pays dividends over the course of generations.
We have to address the Student Loan Crisis, and there is a way that does not require us to forgive and forget, but instead asks us to bail out a generation of Americans like we have bailed out corporations so many times before.
