Student Loans

 

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!