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Wednesday, April 27, 2022

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.


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!        


  1. Actually I have had some of the same thoughts about those who paid theirs, those who made the loans and future college loans. I really think you have hit on a clever solution Joe. Email this post to your congressmen and women.

  2. I've on the same page as you are.

    Have a fabulous day, Joe. ☺

  3. Excellent! Now to get the government people to listen to you.

  4. I know teachers in their 50s who are still paying their student loans. Because that's what you're supposed to do. Pay back what you borrow. I find your tax deduction proposal to be agreeable, and also the interest deduction. Interest rates fluctuate a lot. Back when my cronies got their student loans, the interest was 14 percent!

  5. I think the answer is to reduce the cost of tuition. Don't ask me how.

  6. My Grandkiddos who are in high school now and those in college now took college coursed in high school from local colleges that greatly reduced the need for big loans. In fact a couple of them graduated high school with an associates degree also. Not everyone can do this and I know that grad school and med schools and such rack up the costs. I don't know if there's an answer to it all but we had an editorial in our paper that blamed the housing market on us boomers. The article said we old folks won't move into downsized housing to allow young people to buy our homes so they can have a big house for their family. Now that sort of made me mad. Should I move? Should loans be forgiven? Should the younger generation just work harder, longer or just quit whining? I have no answers my friend. Have a good weekend!

  7. I left a lengthy comment a couple days ago, which seems to have disappeared. I'm not feeding Blogger a hearty treat again! I think your proposed solution makes sense.

  8. When I went to university (in the UK) in the 1970s (yes, I'm that old!) it was all totally free. That was brilliant from someone like me whose parents didn't have two beans to rub together. In fact you got a small grant to pay towards your living expenses.
    It's all changed now and students have to pay. However, the price tag of university is mostly irrelevant. What you repay solely depends on what you earn after university. In effect, this is (financially at least) a 'no win, no fee' education. Those who earn a lot after graduating or leaving university will repay a lot. Those who don't gain too much financially from going to university will repay little or nothing.

  9. I like your idea. In the future the amount of tuition needs to be reduced. Also, the interest rate on loans should be capped at a very very low rate.

  10. Well, I remember when Credit Card Interest was a deduction... and the whole College Loan thing I'm very conflicted about too. Yet, it seems we're dumbing down our Population and so perhaps furthering Education would be a Positive thing so that we don't have a lot of poorly educated and uneducated people. See, I'm conflicted about giving away for Free what a lot of people already had to pay a fortune for... but, I can see benefits to making it affordable to the masses as well... and how it might benefit Society long term. Especially since a lot of low paying Jobs are being replaced by Technology and all those unemployed people will need Training to do what a Gadget can't do... and be able to make a Livable Wage and afford things like Shelter, Food, Healthcare...