Why the Next President Should Forgive All Student Loans
A prominent college president offers some bold advice to the next U.S. president.
If Hillary Clinton is to win this November, she needs to motivate the electorate to come out to vote for something more than a justified aversion to Donald Trump.
Particularly for younger voters and voters with families, she has to capture their imaginations with a bold, simple, and common sense proposal to address one of the most critical financial and social problems currently facing a generation: the student loan crisis. And she needs to do so in a way that can do the most immediate good for the nation at large.
First, all outstanding student loan debt should be forgiven. Second, a new loan program should be created that is tied to incentives for college graduates to choose careers in public service and which indexes repayment to income.
Current outstanding student loans amount to 1.3 trillion dollars, roughly 10% of all household debt. Student loan debt is larger than either car loans or credit card debt. Forty-two million Americans hold student loan debt. Student debt has been a drag on younger generations’ incomes and has contributed to the stagnation in middle class earnings.
The average debt at graduation has skyrocketed from $10,000 in 1993 to more than $35,000 in 2016. Furthermore, the federal government has set interest rates on student loans at twice the current market rate of other types of loans. Going to college should not be a profit center for Wall Street and the federal government.
By forgiving student loan debt—which is largely held by the government—a tremendous economic stimulus would be generated, whose beneficiaries are people, not banks.
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