Should All Student Loan Debt Be Erased? 200,000 People Think So.

There’s a new proposal in Congress that would dramatically trim down many American students’ bills: forgiving all student loans. A petition on SignOn.org  needs 200,000 signatures in order to be delivered to the House of Representatives. As of writing, there are 198,534 signatures so it looks like this is actually going to make some progress.

The Proposal

So what would actually happen according to the petition? The details are laid out below:

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.

For over 30 years, the rich have gotten richer, the poor have gotten poorer, and the middle class is slowly but surely being squeezed out of existence. Instead of more of the same corporate welfare/”trickle-down” economics that have been an abysmal failure for the middle class, why not try a trickle-up approach to rebuilding our economy by targeting relief at those most likely to actually help grow the economy?

Want to sign the petition? Click here to view it.

Weigh In

Do you think this is a good idea? Should student loans be forgiven? Would this benefit certain students more than others? Does that even matter? Weigh in on the Edudemic Facebook page and I look forward to hearing your thoughts!

11 Comments

  1. Eric

    September 17, 2011 at 10:27 am

    actually, the goal was initially only 20,000 for it to be sent. people just keep on signing, so the "goal" keeps rising with that. if that gives any inclination on how popular this idea is.

    I have signed it, as I think it would be an amazing way to get America's middle class a chance at stimulating there economy freely, instead of being burdened by crippling debt. It will allow us to purchase big ticket items that really stimulate the economy, without fearing that it will make our debts an even greater burden.

  2. Ryan

    September 18, 2011 at 12:19 am

    I pray it happens. I owe almost two hundred thousand and make fifty thousand a year. No hope of paying it off. I really should have never went to college. :(

  3. carrie

    September 20, 2011 at 2:26 pm

    I have mixed thoughts about the student loan system. Many schools/others convince people that student loans are a necessary evil/investment in getting an education that will get you a good job, and ultimately more income. Behind that are ever rising tuition/fees at schools trying to serve all high school grads who think that college is the best option for them. Graduating with thousands in debt is not a good way to start life, agreed.

    However, this proposal would be a slap in the face to those who worked to earn scholarships, grants, or cash to pay for their schooling, or who have sacrificed to pay their debts early.

    A more palatable idea would be proportional forgiveness taking into account the current debt and previous payments made, or simple interest elimination (leaving the actual cost of the loan itself), along with an overhaul of the student loan system and requiring more transparency of higher education tuition/fees.

    Separate from the above "professional" opinion of mine: I used to work in financial aid, and witnessed hundreds of students take out student loans to pay for spring break trips, cars, and just *stuff*, having had their education expenses already covered (I could tag almost a dozen of my FB friends with this post, just off the top of my head). I could NEVER support loan forgiveness for these types of consumeristic, future-be-damned people.

    And, do I understand correctly that student loan debt cannot be discharged in bankruptcy and forgiven automatically upon death? Is it advisable for a parent of a child with student loans to take out a life insurance policy on the child that covers that amount? If so, *that* needs to change.

  4. The Bigger Picture

    September 21, 2011 at 6:06 pm

    I had to work my butt of to pay off my student loans. It was really hard. I completely understand how that goal is unobtainable by some and I really feel for them. HOWEVER, if all my friends who have been slacking on paying their enormous bills because they are too worried about keeping up with the Jones' and hosting parties every weekend get their debt erased I want all my money back that I paid! Also, isn't this just another bailout? I mean seriously, debt just doesn't vanish just because the president signs a piece of paper. It's just going to get pushed aside and STILL end up hurting our economy. Why can't the real problems be addressed. For instance, why do we still have to take LOADS of classes that don't have anything to do with the occupation we are studying?!? Isn't this costing us way more than necessary and requiring us to take out heftier loans? If people are having trouble finding work in their field then someone needs to stop encouraging them to take out these huge loans in order to graduate with a degree they will never use…either that or we need the jobs!!!! Doesn't look like that is going to happen anytime soon. Why can't we recommend our graduating students to look into 2 yr colleges….oh wait….is that not as profitable?!? Geesh this is really not a good idea.

  5. champions jetski

    October 7, 2011 at 10:56 pm

    This might be this blog’s greatest piece of writing around

  6. hasu_doshi

    October 18, 2011 at 1:59 pm

    It's a stupid idea. This Hansen Clarke guy is a dope !! Clueless.

    If you took on the debt, you owe the money. So many people today have no character, no personal responsibility. No backbone. So many young people today just wnat their 'rights,' and RUN AWAY from theri responsibilities.

    I paid off $22k in student loans. It wasn't easy and I worked a f-t job and a p-t job both while earning my master's degree at BU. I gues that woudl be too "HARD" for today's 20-somethings.

    Honor your commitments!! You signed contracts to take out all that debt. Some of it you spent on beer and vacations, not doubt.

    What you really need to do is hold the school you went to accountable!! Make THEM reimburse you. DOH !! Not me and all the other taxpayers would be left holding the bag for this, and then we'd STOP SEPNDING MONEY so the ECONOMY WOULD TANK AGAIN !!!

    • hasu_doshi

      October 18, 2011 at 2:03 pm

      If this passed many banks would go out of business. People would lose their jobs. And there would be even fewer banks competing with each other than there are today. You think that would stimulate the economy ?!! LOL !! Go back to school!! ..and this time take basic economics, not eastern philosphy !!

      It's frightening how ignorant some of your posts are. And you people claim to have gone to college??

      What you really need to do is hold the school you went to accountable!! Make THEM reimburse you. DOH !!

    • JuliaWhoami

      November 9, 2011 at 7:04 pm

      Some fields of study require 8-10 years of school while working f/t on an internship that is UNPAID. After all this school, you get paid 30k a year while helping others, saving lives, and helping communities. There would be no way of paying back this 150k loan on this income. Loan forgiveness is a necessity in addition to raising salaries that make a difference and lowering salaries of professions that do not make as big a contribution.

    • workerbee

      November 9, 2011 at 7:15 pm

      Some fields require 8-10 years of schooling while working f/t at an internship that is UNPAID. People have to quit their jobs in order to complete the program. In addition, if you find a job after school, you would be lucky to be paid 30k while your debt can be 140k. Student loan forgiveness is a necessity in addition to raising salaries for professions that make a real difference in the lives of individuals and communities.

  7. DfF

    October 19, 2011 at 2:48 pm

    This subject has many facets to consider for some … I completely agree with personal responsibility and hate the Govt Bailouts that continue to take America deeper into a debt our childrens children will still have. However, when our now graduated son went to LCB Culinary School, we had no idea how to help him. I sought advice from the school, from Dept. of Education, and my bank, which was Wachovia at the time. Neither my husband or I went to college, so we did not have experience in student loans, what to do and not do. After the fact, I can say I would never co-sign for a student loan and I would never encourage anyone to get a Private Education Loan. We did both thinking this would help our son and he could put his loans together and make one affordable payment after he graduates… I can now easily confess that the debt he is paying, for less than 2 years of school, (over $55,000) – has been the most expensive lesson we have ever learned. Our son is making payments that could not be consolidated because of the type that they are, and he is strapped. With his degree he is making a whopping 24,000 a year… There needs to be more counseling for students and parents when it comes to affording (or not) to go to college. I hold no one but us responsible for the mess he is in and we are in… but I'd be lying if I didn't admit that a student loan forgiveness plan, even partial, would be a wonderful relief for our family. His debt has affected our credit standing more than I like to admit. And no need to tell me how stupid we are …, I already get that from myself…

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