We, the undersigned, fervently urge you to support H.R.4170: The Student Loan Forgiveness Act of 2012, introduced on March 8, 2012 by Rep. Hansen Clarke (MI). And more than support, we encourage you to co-sponsor this important, life-changing bill.
H.R.4170 is a fair repayment plan. This 10-10 plan proposes 10 years of repayment at 10% of the borrower’s discretionary income (discretionary income is defined as 150% of poverty level). At the end of repayment, any remaining balance is forgiven and is not considered taxable income.
For younger borrowers this will afford them the opportunity to better plan for their futures, knowing there is an end in sight, they can manage their student loan payments rather than be enslaved by them.
For older borrowers it means they have the hope of actually repaying their loans before retirement age and not fear garnishments to monthly Social Security checks; for many in this economy SS may be their sole source of income at retirement.
While the word “forgiveness’’ in the title of this bill describes a legal action, the moral implication of the word is inaccurate. Student loan borrowers have done nothing requiring forgiveness. We have fulfilled our side of the social contract and, in return, have become enslaved to a lifetime of debt.
FACT: Since 1980, average tuition for a 4-year college education has increased 827% http://tinyurl.com/7ohxq5h
FACT: Since 1999, average student loan debt has increased by 511%
FACT: In 2010, total outstanding student loan debt exceeded total outstanding credit card debt in America for the first time ever http://tinyurl.com/3y9koxy
FACT: Total outstanding student loan debt now exceeds $1 Trillion http://tinyurl.com/2fegw9d
FACT: This debt impacts the lives of individuals of ALL ages. In March 2012, the Federal Reserve Bank of NY released student loan balances by borrowers age:
• Under 30 33.9% $295 billion
• 30 to 39 32.8% $285 billion
• 40 to 49 16.4% $142 billion
• 50 to 59 11.3% $98 billion
• 60 & over 4.2% $36 billion
• Unknown 1.4% $12 billion
FACT: Consumer protections have been stripped away. Unlike other unsecured consumer loans there is no statute of limitations, these loans cannot be discharged in bankruptcy, nor can they be refinanced. With credit card debt, account holders in good standing often enjoy reduced interest rates—not true of student loans. These debts follower borrowers to their graves. http://tinyurl.com/y46sw9v
FACT: Also unlike other unsecured consumer loans, the interest on student loans is capitalized--this practice is exempt from State usury laws. It is these industry practices that make managing payments unreasonable and impossible. http://tinyurl.com/2abz6fb
More facts here: http://tinyurl.com/cfeak78
In short, student loan debt has become the latest financial crisis in America and, if we do absolutely nothing, the entire economy will eventually come crashing down again, as it did when the housing bubble popped. Reasonable minds can disagree as to the solutions but they cannot disagree on the existence of this ever-growing crisis, as well as the unsustainable course we're on toward financial oblivion.
As a result of more than 30 years of treating higher education as an individual commodity, rather than a public good and an investment in our collective future, we find:
• Those buried under the weight of their student loan debt are not buying homes or cars
• They are not starting businesses or families
• They're not investing, inventing, innovating or otherwise engaged in any of the economically stimulative activities that we need all Americans to be engaged in.
If we're ever to dig ourselves out of the giant hole created by the greed of those at the very top, this must be remedied!
This bill, and the wrongs it proposes to right, is not a political bargaining chip. It is not a right vs. left, nor a party issue—it is a human issue!
Please, show us that you are more concerned about the citizens who elected you, and that you swore to represent by upholding the constitution, than you are about enabling those responsible for increasing profits for a corrupt system that continues to oppress millions of student loan borrowers.
We respectfully request that you do the right thing and support H.R.4170.