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I’m not a policy expert so I’m not writing the “loan forgiving” legislation to propose tomorrow. I’m allowing for nuance in how we discuss *who* gets their loans forgiven but I want to start by saying that there is no point in forgiving loans if we do not accompany that with some sort of regulation that address the continued rising tuition costs. We can’t just say: ALL OF YOUR LOANS ARE FORGIVEN! to a certain block of people without also then regulating the way colleges and universities raise tuition costs or making some type of college free to some students. To me, a perfect world would be to A) forgive loans while also B) regulating the increase and/or offering free tuition in some way so that tuition costs will start to rise more in line with inflation. By one estimate if vehicle costs rose like tuition we’d be paying $90,000 for a Toyota Corolla today.
So, as I talk about student loan forgiveness please know that I believe a move like that *must* be accompanied by something that *also* addresses the rising cost of tuition beyond inflation. I don’t think the market is going to adjust on it’s own. I don’t trust unregulated capitalism.
Let’s start by saying kids today are getting a lot more student loans than when I graduated in 1998 and 2001. Student loan totals have grown 400% in the last 15 years. Because of this I don’t like to listen to anyone preaching how they paid off their loans and so everyone else should have to. I see this argument on Facebook and on Twitter and even sometimes in my own peer group. My reasoning behinds loan forgiveness has several parts, most of which address why the above argument holds no water for me.
First of all? Just because you had to carry a burden doesn’t mean other people should have to as well. I don’t understand this logic. Don’t we want our society to be better for our kids? Especially if…financially…they have it harder? I mean…their loans are FOUR TIMES what ours were? AND INCOME HAS NOT RISEN AT THE SAME RATE. I just don’t find that argument valid. I understand it has emotion behind it and it’s really difficult to debate emotion, but the world is not the same…even ten years ago. Tuition rates and student loan balances are rising beyond the scope of any other consumable good in our country…so any point of comparison is moot to me.
Second of all, there are a lot of system inequalities that we can not seem to get a handle on and student loan forgiveness would be a good place to start. There’s still more generational poverty in marginalized communities so even if someone is able to go to college and get a degree, they are also helping the generations before them and…sometimes on top of paying off their loans…are struggling to make enough of a financial impact to save for their retirement or for college for their kids. Especially if their in that shaky not-poor-but-not-upper-middle-class territory where they don’t necessarily qualify for financial aid but their parents don’t have retirement saved up for themselves. The trick to big systemic changes is to break generational trends and I think something radical like student loan forgiveness (or even free college) would help break these cycles of generational poverty that are so hard to overcome, even under the best of circumstances.
Third of all, and this relates to the above with generational financial support, my personal story is a great example of what student loan forgiveness can look like. In a weird way, I had my student loans forgiven when my Dad died.
Because I do not come from a lineage of generational poverty, my Dad was able to build up retirement for himself and pay into life insurance. So, when he died, we were able to use that money to get ahead which helped us eventually pay off our student loans earlier. My life kinda looks like what someone’s life might look like if they had their loans forgiven. We were able to take that loan payment money and instead start putting it towards our retirement and towards our kid’s tuition savings so that, hopefully, they won’t need as much student loans and what they need…they can pay off without also having to worry about caring for us in retirement.
Here’s the most important point which also uses my story as a foundation: We would still be paying our student loans off until 2021 or 2031, depending on how you look at choices we could have made…but instead we were able to do things like buy a house and set up college funds for the kids. This means that when we retire we will need less government assistance and our kids will hopefully need less student loans. And do you know what that means? Because we were able to pay off our student loans early…we are better set up to not need government assistance later.
We have retirement savings and a home mortgage now so we won’t need senior subsidized housing. We have 529 accounts for our kids which have no where near enough to pay for college entirely, but will definitely cut their loan amount by a bit. I know it seems like loan forgiveness programs cost a lot, but it will help the current generation prepare better for their own future and the future of their children which means less reliance on government programs. Imagine if you could go straight from college to saving towards a 401K and putting aside money for college for your child? Something you just can’t even fathom if you’re living paycheck to paycheck trying to pay off our loans.
(I have a 25-year old son who does have some student loans and so I speak from experience watching him try to budget.)
Like I said, there are ways this type of legislation could be problematic and I trust people smarter than me to conquer those challenges, but I think student loan forgiveness is a very important issue that I support right now. If you want to dig into candidates view/proposals my favorites come from Andrew Yang, Elizabeth Warren, and Bernie Sanders.