The idea of forgiving all student loans is back in the news with pressure from presidential candidate Jill Stein along with special interest groups like Signon.org and Moveon.org – but is it a good idea?
There is no doubt I feel their pain. I have recently graduated college (a degree in Accounting of all things) and could not find a job. So I ended up going into huge debt for literally nothing! Maybe bragging rights – since an accounting degree is so cool.
The horrible job market is the direct cause of the jobless college grads. Companies can’t hire as many people, so they might as well hire someone more experienced with more degrees. And out of this frustration comes over 300,000 signatures for the issue and a presidential candidate. But what would happen if all student loans were forgiven?
On their website, Signon claims:
Forgiving the student loan debt of all Americans will have an immediate stimulative effect on our economy. With the stroke of the President’s pen, millions of Americans would suddenly have hundreds, or in some cases, thousands of extra dollars in their pockets each and every month with which to spend on ailing sectors of the economy. As consumer spending increases, businesses will begin to hire, jobs will be created and a new era of innovation, entrepreneurship and prosperity will be ushered in for all.
The evidence for this claim is nonexistent. Of course, the health of the economy depends on college grads getting into the work force. But arbitrarily forgiving debt is not the way to do that. For one, no debt does NOT mean there will be more jobs. There is no correlation what so ever. I want to remind the reader I would LOVE being debt free – but anyone with a college education should realize it is not feasible.
Many people have already investigated the possibility of forgiving student debt and there is a strong consensus that it is a bad idea. Forgiving student loans would not stop future loans from being made. The president does not have the power to forgive student loans. With the loan companies stay stable if they know the government will simply forgive debt?
What is really needed, is a cool-headed response to the crisis. We need to realize, even if we are in debt, the loans clearly gave terms that were agreed to. We need to understand that forgiving debt will not create jobs. And finally, if someone like Jill Stein was in power to forgive debt, there is no way responsible congressman would allow that to happen. With all the debt in America today, no special interest group would allow this write off without their own considered.
Reasons why Student Debt write-off would NOT work:
1. No debt does NOT mean employment.
2. The president does NOT have that power
3. Student loan terms are clearly defined and are easy on your wallet
4. Forgiving student loans would destabilize the loan companies. They would not easily lend to future students there for, future students will have difficulty getting loans
5. Loan forgiveness is NOT stimulating. Simulating the economy needs spending money
6. Why college grads? Arn’t they the ones most likely to get a job?
If there is anyone who thinks this is actually a good idea after investigating the claims, obviously doesn’t have or deserve a college education.
I refer the level-headed reader to Representative Karen Bass’s page regarding the Student Loan Fairness act where a bipartisan bill is in the works to control interest rates as well as stress financial responsibility while proving a safety net to those who are struggling to pay.