Student Loans
Does my blog
disclaimer say no political posts? I don’t
think this counts as political. Besides, my post, my rules.
Anyway.
There is a
lot of talk these days of granting college loan forgiveness. To me this is very interesting.
I agree it
is sad that so many of our young people are saddled early in life with a debt
burden that is difficult to carry and also live the “American Dream.”
Owning a
home, having children and all those things that young people expect are delayed
because of this burden, and quite frankly many of these things are difficult to
obtain later in life.
Cancelling
this debt would be removing a financial ball and chain from our many young
college graduates.
Can the
country afford this? It is probably not
good timing in lieu of the current inflationary environment, but long term I
would say yes. The removed financial burden
might even allow young people to make decision that might ultimately prove to
be an economic boom resulting in increased tax revenue…maybe.
There are other
arguments against student loan forgiveness.
Is it fair
to people who have worked hard to pay off their obligation to see others have
the debt just wiped away? I know it would
piss me off, but then life is never always fair.
My question
is, “If student loan debt is washed away, is that the end of student loans?”
I mean it is
one thing to give one group a large break, but why would future college
borrowers expect to pay-off their loans? Who
would make such loans?
It would be
great for many people if home mortgages were suddenly forgiven, but what bank
would ever provide mortgage loans again.
The ability
to borrow money is a good thing. And
providing young people the means to further their education is a good thing for
everyone.
What is the
answer?
Sadly, I don’t
believe college loan forgiveness would bode well for future potential college
students.
One problem
is the high college tuition expense. Clearly
in many cases college simply is too expensive.
The ease of borrowing money for tuition is, ironically enough, probably
one reason for high tuition costs.
I think government
could offer schools incentives and or some disincentives to curb the high cost
of a college education.
“What
might those incentives or disincentives be Cranky?”
“Do I
look like a politician? There must be some smart people who could figure it
out.”
In the meantime,
I do have one suggestion to reduce the burden of college loans.
Make the
cost of college tuition and the interest on college loans a 100% tax reduction
over a period of…hmmm…let’s say 20 years.
If your
tuition costs $100,000 then for the next 20 years a students Federal Income tax
liability would be reduced by $5,000 each year. Interest on college loans would also be a 100%
tax liability reduction.
This tax
break would make the college loan burden more palatable, while not destroying the
college loan market.
Would this
solution still be unfair to those people who worked and suffered to pay off
their college loans?
Yes! Suck it
up buttercup, you still have your education, and down the road it just may help
pay for your own children’s education.
Problem
solved!
