Forgive Student Loans - Ideas for Change in America

How about this: President Obama has already worked as a senator and as President to increase the Pell Grant to low-income students who are CURRENTLY in college. What if we made those increases in the Pell Grant retroactive to anyone who carries federal student loan debt.

It could work like this: The federal government has the financial aid information that you filed with your FAFSA when you were applying for your loans. They could compile the data for every student who was eligible for a Pell Grant during any semester when they were enrolled more than half time over the last 7 years. Anyone who received the full Pell Grant when they were in school would have the difference between what they received and the new increased Pell Grant in each semester credited against their student loans. Anyone who was eligible for a Pell Grant and didn't get one would get the full amount credited against their student loans.

Combined with the credits, we should also require anyone servicing those loans to adjust the payment to reflect the new and reduced principal amount, so that the payment alo reduce people's monthly payment. While we can't renegotiate private loans, the government should step in and offer consolidations into federal loans, assistance with interest payments or some sort of forbearance assistance to people who have substantial private loans. Ideally, I'd love to see the 10 year loan forgiveness extended to everyone -- no one should be paying off their student loans with their social security check, which is the reality for a lot of people with graduate degrees and 25 year forgiveness programs.

Reducing student loan payments is the perfect stimulus -- it's targeted at young people and young families, who are the engine of both the economic recovery and the housing recovery that we so desperately need. As people and families starting out in the world, we're more likely to spend money on necessary household goods, health and dental care, breaks for the car or books and shoes for the kids than other income groups. And to the extent that the Federal Government is forgiving federal student loans, the outlay is minimal -- what the government is doing is forgoing future revenue, rather than printing money. We've already admitted that college has been too expensive -- we need to do something for people who, despite the expense, invested in themselves and our economy so that we can invest in the recovery.

Suggested by Anne Redalen Fraser on 03/17/2009 @ 04:23PM PT

Report close
You must be signed in to report content.
Comment on this Suggestion

Instead of forgiving student loans completely, the government could at least lower the interest rates. 6.8% for a federal loan is outrageous, particularly considering that interest rates for everything else have dropped so dramatically recently. Student loans should be a benefit the government provides for students, not a way to extort money from them. If you reduced interest rates retroactively, you would free up a significant amount of disposable income each month that recent graduates could spend on other things that would help the economy, like mortgages and consumer goods. Please save me from the crazy high interest rates when I graduate in May!

Suggested by Katie Walker on 03/17/2009 @ 04:13PM PT

Report close
You must be signed in to report content.
Comment on this Suggestion

Too much Bush/AIG-style corruption amongst employees at the Dept. of Edu's SOUTH CHICAGO Student Loan Headquarter office and its GREENVILLE, TEXAS (near Dallas) Loan Collections office, which was supervised by [heavy Republican Gubernatorial-donator] NCSPearson for MANY years.
Hope the FBI/DOJ raids these places and all the above engaged in crimes get arrested and serve some sigificant jail time!

Suggested by Steve Spacek on 03/17/2009 @ 12:14PM PT

Report close
You must be signed in to report content.
Comment on this Suggestion

LIE:  If I finish school and get the degree, I will have such an awesome job that I can easily afford to pay back the student loans.

A Bachelor's degree is the "new" high school diploma. Jobs one could get 10 years ago with a HS Diploma/GED now require a Bachelor's Degree, and many pay enough to still qualify one for a hardship deferrment on one's student loans. Not to mention, the guy bagging your groceries could very well have a Masters Degree.

What is a Bachelors? 2 years of classes like English, Music Appreciation, Speech, Philosophy, Algebra, etc. (like the classes you already took in high school). Then 2 years of classes on a topic that the degree claims you have 4 years of learning.

I don't have a degree yet because I worked full time going to school part time. I was too busy working, gaining experience, all of which is completely useless without the stupid piece of paper that says I can do what I've been doing for the last 10 years of my life. I could put a very decent down payment on a house with the money I would pay out for that stupid piece of paper. Hmmm, house or stupid piece of paper.

It's a hustle. My suggestion to make this idea better is college education reform. They don't have to make it free, but community and state colleges are supposed to be affordable, as opposed to competitive in price. Also, college credit should be offered for many high school classes (like almost every class you take your junior and senior year). And they should transfer as basic core requirements rather than electives. Stipulating a certain grade in the class for it to be transferrable promotes better grades and the concept "you have to earn it." In addition, the curriculum needs a revision strategy, in both high school and college.  Anyone of you reading this, how many people do you know with a Bachelor's Degree who is a blazing idiot on their subject?

This shouldn't be about a short term shot in the arm boost to the economy. I personally would rather see money going to cover student loans long before bailing out companies too stupid to stay afloat on their own, especially since they are the reason most people run out and get a loan to go to college and get the degree and then can't get the job because the guy that got the degree before you 5 years ago wants a raise.

Reforming the education system as a whole would act as a long term benefit.  Just because Rome fell doesn't mean the United States has to be stupid too and follow suit. The one thing that keeps our country strong are our people. They are the President, the Congress, the military, the economy, the judicial system. I don't think you will find too many people today capable of the same genius of our forefathers. It's wonderful the majority knows how to read and write, but now let's take it one step further and teach some real critical thinking skills. Education's productivity is very low in this day and age.  We should be focusing on the textbook concept of efficiency and effectiveness.  Total Quality Management, that's what I'm talking about.

Suggested by Michelle Grewe on 03/17/2009 @ 11:03AM PT

Report close
You must be signed in to report content.
Comment on this Suggestion

I have read the comments on this post and other posts on student loan forgiveness and I think what many of you just don't quite understand is the government has no money of its own to give anyone. Its your money that you pay to the government in taxes. Every loan we take out from the government goes against the national debt and it must be paid back because that interest is just growing. The "government isn't paying that national debt WE AS TAXPAYERS ARE. The government doesn't produce anything, they don't manufacture anything nor do they do anything for industry other than regulate it to death. The government prints money but that is just paper with no value unless they borrow from other countries to make it worth something. That should be very obvious unless you have not been paying any attention at all these past few years. China doesn't need to make war with the USA just ask for their money back and when we can't pay it they will own more of this country than we do.

The car companies are not failing because they produce bad cars, they are failing because the government has become so powerful and cumbersome with regulations (EPA, CAFE Standards) that car companies need to spend enormous amounts of money to comply with these regulations to the point they can't function. If car companies were left alone to produce cars they would be thriving but the government has its hands in the industry for so long that now its dying. They got a bailout for trillions and they are still going under.

The coal and oil companies and farmers are next with all this green nonsense. I believe in regulations when it comes to pollution like no dumping toxic waste in the water supply or pumping it into the air but the regulations have gone way too far. As far as the government goes if a little tax is good then a lot of tax is better and coming up with new and improved taxes is just the best. Can you imagine that the government now will be taxing farmers on cow farts? Oh yes, now methane is a pollutant. When you finally accept the fact that Al Gore is a fraud and there is no such thing as global warming OOOPS sorry, "GLOBAL CLIMATE CHANGE" then you'll start to understand just what's going on. I mean CO2 is now a pollutant??? Hello Al, if you just stopped breathing you would really help cut down on CO2 emissions. Lets see, just concoct a phony scheme and get phony scientists to attest to it then get the media to spread it and convince millions of people to believe it THEN start up a ton of left wing eco-Marxist tree hugger groups to lobby for it and you just created the biggest scam of the century and diverted a whole lot of tax payer money into it. Why did they change the name from global warming to global climate change anyway? Well its quite simple, the planet warms and cools in ways we just have no idea about so if the planet is not actually warming then they can't very well sell it as global warming can they? Now if you call it GLOBAL CLIMATE CHANGE then any change in the climate can justify their hoax. So where do your tax dollars go you ask? To fund a huge hoax. Don't believe it? If global climate change were true the polar ice caps would have melted by now since this nonsense started about 30 years ago and would have submerged Florida, California and most other coastal states. It's a multibillion dollar a year hoax that many MANY so called experts are benefiting from through your hard earned tax dollars.

How can you blame a bank for failing when the government through HUD and the fair housing act FORCED THEM to make sub-prime loans to people who couldn't afford to pay them back? The banks knew it was bad business but they had to do it or they were going to be penalized if they didn't. Side groups like ACORN went into banks and protested that everyone deserved to own a house, even if they can't afford a house. The money went out and the people that should never have owned a house are now back where they should have been, RENTING!!

Don't believe it? Here's proof :
http://www.youtube.com/watch?v=cMnSp4qEXNM&NR=1

If you want to blame anyone blame the blathering, slobbering congressman Barney Frank and Senator Charles Schumer.

Now to the point, all this stimulus, bailout, handout money for everyone has got to stop. Do you understand that while your hand is out the governments hand is in your back pocket taking 100 times what they will ever give you?? WAKE UP!!! there is no free lunch and the governments money is YOUR MONEY. Don't you get it. If we keep subsidizing failure we all fail, maybe not tomorrow or next week but eventually we all fail and the government grows beyond control and through all their regulations we are slaves again. Don't believe me just look at some of the current news articles from the UK newspapers and see what a happy socialist utopia they live in. All those trillions of dollars of bailout money is going to come back on everyone in this country and all those politicians who made it happen by ramming these bills through so fast will be long gone. Do you have kids, grandkids? Look them in the face and say to them, little Johnny, Suzie your going to be paying this back for the rest of your life because the greatest country in the world decided to start giving handouts to irresponsible people and businesses and subsidizing failure.

I read in another post that said we should socialize the education system like Europe, give free education to everyone. Hello!!! Who pays the teachers and the schools expenses? Your tuition does, not the government. Hello... Hello... We pay the government with our taxes so if we give free education and the government pays the teachers and the schools WE ARE PAYING FOR IT ANYWAY.

Everything the government gets its hands on is just a mess like Medicare, Medicaid, then the banking system and the automotive industry and now they want to take control of health care by socializing it. Look at socialized medicine in Europe and Canada. Do you like to call your doctor, get an appointment fairly fast and if you can't CALL ANOTHER DOCTOR and get one? Do you like to have your problem taken care of as soon as possible? Usually in a few days depending on the situation but ultimately as fast as humanly possible? Do you like to go to the hospital and be rushed right in when you have a serious problem? If your answer is yes, yes, yes and yes then you should close your eyes and clasp both hands together right now and thank God you live in the greatest free country on the face of this earth.

Welcome to socialism. How would you like to be put on a waiting list for over a year for care or just turned down completely? How would you like to be denied care because your are too old, too sick, to whatever and not seen as a viable productive part of society anymore? How would you like a lottery system for that bypass surgery? How would you like to be taken off that very expensive cancer medication because some bureaucrat thinks someone else would benefit more from it and they just can't pay for both of you to have it? If your answer is no, no, NO AND HELL NO then you should close your eyes and clasp both hands together right now and thank God you live in the greatest free country on the face of this earth. You think this is a joke, look for yourself :

http://www.liberty-page.com/issues/healthcare/socialized.html#britain

Everything the government is doing right now is going in completely the wrong direction and socialism doesn't work. It doesn't work in the UK, it doesn't work in Canada, Australia, Cuba ANYWHERE and its not going to work here. All its going to do is take more of what you take for granted like your freedom, your hard earned money and your liberties. This is a free country and as Americans we like that freedom and the more we look to the government for a handout, bailout, stimulus check or any other form of welfare the more freedom we give away and its freedom we will never get back. I will not sell my freedom and the freedom of my family for a bailout.

Life is about responsibility and integrity and doing what's right because we are not in this alone. There are millions of other Americans out there who have the right to their life, their liberty and happiness and when you take money from the government in any form of welfare your really taking it from another one of your fellow citizens through his taxes.

If your not making it where you are now you have the right to move. This is America, you have that right but you don't have the right to take something that is not yours like other peoples hard earned money to stay where you are in a failing situation. Every bailout that our government has given out is your money not theirs. Again, the government has no money, its the money of every hard working tax paying citizen in this country. Why is it fair to me that a company is failing and that I should pay to keep them in business? Why is it fair that someone that never should have owned a house in the first place got a loan that they should never have received and couldn't pay and now I (AND YOU) have to pay for it through my (AND YOUR) taxes. I rent but I have to pay for someone else to stay in a house they can't afford because the government says so??? I went to college and accrued $50,000 in student loan debt and after 8 years I'm just now in the position to start paying them back. I did the economic hardship and forbearances for years but I also planned my course moving from Pa to De and then to NC where I found a good job. I started my life over several times along the way and you know what I'm a stronger person for it so don't sit there and whine because a job doesn't fall from the sky and hit you over the head. You may have looked but sometimes you may need to look a little farther to find one. Its your CHOICE, and last time I checked its still a free country so either stay where you are or move. If you can't make it where you are and choose to stay there don't put your hand out and expect other hard working American citizens of this country to pay your way.

The only thing that makes any sense at all with regard to relieving student loan debt is if the Federal Government would give a big tax cut to any company that would contribute money to one of its employees for repaying their student loan debt regardless of their degree. Take the student loan payment right out of the employees check and add to it the companies tax cut contribution. It would have to be any company and any degree because right now I have a BS in health care but I work in manufacturing, much like many others that don't work in their field of study. I would say keep it generic so it applies to anyone working anywhere. Now to get the government to actually give a true TAX CUT to a business is going to be like getting Al Gore to admit he's a phony and global warming OPPPS global climate change doesn't exist.

Suggested by Brian Arnone on 03/07/2009 @ 12:32AM PT

Report close
You must be signed in to report content.
View 1 Comment

It just makes sense, even if it's a partial reduction. Students are big consumers, they patron restaurants, bars, clothing stores, etc... Ask the city of Boston how much it relies on its student population for its economy.

Suggested by Tim Calvert on 02/20/2009 @ 10:08AM PT

Report close
You must be signed in to report content.
Comment on this Suggestion

I have $52,000 in college loan debt (federal and private). This day and age, you have to have a college degree to get a decent job...whether you can afford it or not. It is sad that a college graduate enters the "real world" for the first time with so much debt over their heads. Instead of looking towards jobs that fit my area of study and my interests, I have to go where the money is in order to pay the minimum on my loans each month.

Suggested by A B on 02/17/2009 @ 03:03PM PT

Report close
You must be signed in to report content.
Comment on this Suggestion

Join this Facebook Group:

http://www.new.facebook.com/group.php?gid=58440324477

Or, join this one:

http://www.facebook.com/home.php?#/group.php?gid=46657437878&ref=mf

Suggested by Kevin Bartoy on 02/13/2009 @ 05:08AM PT

Report close
You must be signed in to report content.
Comment on this Suggestion

Sign this petition:

http://www.thepetitionsite.com/1/Real-Economic-Stimulus-Forgive-Student-Loans

Suggested by Kevin Bartoy on 02/13/2009 @ 05:07AM PT

Report close
You must be signed in to report content.
Comment on this Suggestion

With the current economy it is becoming difficult to manage the day to day expenses of getting by and a student loan debt that continues to grow. As graduate student with 2 masters my husband’s student loan debt has now grown to 94,000 with an interest rate locked in at 8%. As these loans were disbursed before the HR5 bill, there is no chance that this will ever change. With 2 incomes we still struggle to get by. We should have the right to refi the loan to a more manageable interest rate; we can refi our home, personal loans, and even car loans. With the amount that we owe any bank would still make a substantial profit from holding the loan. A change in this process would provide relief for many professionals which in turn could provide more discretionary income that will help stimulate the economy. It's a win win for all involved.

Suggested by Shannon George on 01/30/2009 @ 06:43PM PT