Student Loan Petition

Day 19 | $24,666 paid | $66,051 till freedom

WOW. Have you guys heard about this? My friend just posted it on her Facebook wall.

Want a Real Economic Stimulus and Jobs Plan? Forgive Student Loan Debt!

To be delivered to: The United States House of Representatives, The United States Senate and President Barack Obama

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. A rising tide does, in fact, lift all boats – forgiving student loan debt, rather than tax cuts for corporations, millionaires and billionaires, has a MUCH greater chance of helping to rise that tide in a MUCH shorter time-frame. The future economic success of this country is wholly dependent upon a well-educated, prosperous middle class. Instead of saddling entire generations with debt from which there is no escape, let’s empower the American people to grow this economy on their own!

Therefore, we, the undersigned, strongly encourage Congress and the President to support H. Res 365, introduced by Rep. Hansen Clarke (D-MI), seeking student loan forgiveness as a means of economic stimulus.

Apparently they need 230k signatures and are fewer than 900 away from their goal.

I’m torn on this. I, personally, will not sign. I don’t want the government interfering with my life, and I’m not a big fan of charity. Of course, I did take the first-time homebuyer tax credit, so maybe I am! But I had nothing to do with making that money available, and I would have been silly not to take it. Just like if this thing passes, it would be silly for me to not take it.

But I won’t help it pass. I sincerely think that people can cut costs and increase revenue to pay off their loans. That being said, if it does pass, I’ll be the first one with my hand out; I’m not going to refuse it based on principle.

While I won’t help it pass, there are people who will–I’m thinking of the people who took on loans, went to a second-tier school, and couldn’t get a six-figure job after graduating–or even a job at all–because of the economy. And maybe these people should go after the money. When people take on student loans, they assume certain, basic things–one assumption is that the economy won’t crash when they graduate, or if it has already crashed when they enter grad school, that it will recover by the time they graduate. This is probably a reasonable assumption, but an assumption which, unfortunately, has proven to be false.

I think this is an irresponsible program if it pays off the student loans of people who went to a top-tier school, are single, and make six figures. In other words…me. I think there should be strict guidelines in place so that only the people who truly deserve it will get it.

So who “deserves” to have their student loans paid off? Great question. People with families? People with undergrad loans only? People who have been unemployed for two or more years? People making less than $50k/year? What about people whose loans are 20% comprised of the money they used to go on trips around the world while at school? I’ll leave this one for the comments–definitely interested in what you guys think. Something else to ponder–is there any merit to this at all? Will it really improve the economy? I know that when I pay off my student loans, I’m selling my house, quitting my job, and backpacking around Europe, which probably won’t help the US economy one iota!


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12 responses to “Student Loan Petition

  1. Mike

    I am not a fan of it, and I like your analysis.

    My take — While I deplore some forms of student loan debt, especially the type associated with University of Phoenix and similar quasi-degree mill universities (due to the low resulting market value), I think that forgiving such debt would be irresponsible. The U.S. does not even *have* the funds to forgive such debt, and any forgiveness would only add to our national deficit.


  2. Cassie Olson

    I do love your take on this and I agree with the poster above. Our government does not have this money right now. And I think it could improve our economy if it weren’t in such a great debt already. And I agree with you 100% on who should be able to get their debt forgiven. For example I have three friends that I can think of off the top of my head that attended Belmont University in Nashville Tennessee for 4 years that have around $80,000 in student loans. Belmont may not be Harvard but still a very nice school. Two of them are now working minimum wage jobs making no more than $8.50 an hour (which in Tennessee is actually above minimum wage, but still not much) One of those two graduated three years ago now. The other one is volunteering in Korea teaching English to children. She has also been applying for jobs on a very regular basis for those three years but because her degree is so specific that they’re aren’t many jobs in her field to begin with, but now it’s even worse. That to me seems like someone who should fit in the bracket of people who deserve it. But like I already said, our country is not in a position to be doing this right now.

  3. Zeona

    Out country bailed out the irresponsible banks who were giving out evil loans that no one could afford, making hand over fist, while innocent (but stupid) Americans paid dearly. I think it’s definitely our turn to get bailed out. Americans are brained washed into thinking that we should pay exorbitant amounts in order to deserve a shot at higher education, when many other countries give free education and stipends for books and supplies. I know the government doesn’t have the money now, but it shouldn’t be our fault that they blew it on bail outs and a war that I don’t think anyone is behind anymore. We should subsidize higher education in order to have a smarter, more productive, and confident society. I would definitely get my masters or more if it didn’t come with the ball and chain of huge debt. And on the issue of who deserves it: I doubt the government would go though the hassle of qualifying people. They’ll just forgive government loans, many people will still have large privates to deal with. Whether it will stimulate the economy? I’d probably save the extra cash for an international vacation too. At least it’s helping the airlines. 

    • Mike

      Just note that a Master’s does not have to be expensive. I am wrapping up my Master’s right now, and the total out-of-pocket cost will be under $4000. As such, I simply paid cash, rather than messing with student loans.

      Scholarships obviously came into play, but so did chasing down scholarships. My friend/enemy at one scholarship office is the woman that I called repeatedly for status updates on my scholarship request. 😉 I later sent her a long “thank you”, to which she was really appreciative, but I definitely had to chase down the money. (I think the author of this blog reported similar scholarship efforts and successes with his scholarships.)


    • Love the passion. And the hilarious finish to your comment.

  4. Sarah

    I’m not exactly sure that I would want the government to pay off loans for people who haven’t been able to find a job that appreciates their degree. While I have sympathy, I also think that people could do more to qualify for the programs already in place to forgive or avoid loans. In this blog’s case, I think the author here is doing exactly the right thing by buckling down and paying the debt.

    I don’t think it is irresponsible to take on 100k of debt when you plan to pay it back, and you are getting a degree in a field that tends to be lucrative. The problem is that so many people with that much debt didn’t think it through to begin with and should have realized that they wouldn’t be able to pay off the debt with just an undergraduate degree in liberal arts, etc. I don’t really agree with further subsidizing that kind of expensive education (it is already quite subsidized).

  5. This petition arguably has some merit, but the truth is that 85% of loans are not in default. (And, frankly, people who opt to go to very expensive Ivy League schools will likely not get much sympathy when other cheaper options are available.) There are definite changes in the law necessary, but eliminating close to $1 Trillion in government receivables is likely not the way to go. Tackling the issues of default are necessary, and helping those affected, but the big elephant in the room is the ballooning cost of tuition and related expenses. I address this on my blog here: “Defaults on college & university student loans: The next US economic bubble to burst?”

  6. Mark

    8 months later, but you did encourage comments …
    I think this is the worst idea out there. People are already majoring in english, history, philosophy thinking that they’ll get a job out of college just for having a B.A.
    While I love that people can pursue what they enjoy, those majors aren’t going to pay the bills, and the government should not encourage people to pursue those majors based on lack of fiscal accountability for the student.

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