Is Forgiving Student Debt a good Idea?
Tertiary education in America is expensive, and the economic situations are harsh such that students cannot access decent jobs to enable them, pay off their debts. President Obama is proposing a plan to forgive the student loan debt. The proposed plan Pay as you Earn will enable the borrowers of loan to make a contribution of 10 percent of their income, and after 20, years, one’s loan will be forgiven (cox 14). In doing so, it would ensure that billions of money in the form of student loan debt are forgiven regardless of what was borrowed. This program of debt forgiveness will only encourage parents and children to make poor decisions and often borrow in excess. This can also lead to colleges pushing up the tuition and may fail to assist graduates to access jobs in the market. Many people, mostly students are in support of the program that is likely to crumble the economy of America. This paper does explain with supporting evidence why students need to pay the student loan debt in totality.
Hoare (32) argues that people should work out proper social decisions instead of perpetrating free money. Once this process goes through others are likely to do the same, and this can cripple the economy. This plan of forgiving the student loan debt is problematic since most borrowers can afford to pay off the debt. This is justifiable since most would pay off a certain percentage of their income in the past. This plan will create havoc since all students will like free money while there are some genuine cases that might fail to benefit. According to Cox (13) the principles of economics mention opportunity cost when one compares an option with the best alternative instead of a worse alternative. O’Dowd (723) finds that the idea of lobbying for free money is political rhetoric, and the country should give the money to the needy people rather than college graduates. Hoare (32) argues that forgiving students their loans provides a temporal solution to a long time problem. This is because this approach fails to focus on the problem, fails to reduce the debt among the college graduates and fails to benefit the impoverished in the nation. Cox (13) argues that forgiving debt will add to the national debt.
Heller (5) argues that the idea of forgiving students the loan they owe will have a ripple effect on the economy. If the president assents to the bill to forgive the student loan debt for all Americans, this will affect the economy negatively. Fong (2) claims that the action President Obama assenting to that the bill will create a bad precedent for the future student graduates. Future students will demand the same treatment of clemency, and this will continue to hurt the economy. Congressman Higgins (2) supports this assertion since it is unfair for the taxpayers to foot the bill of students while some taxpayers do menial work and never had a chance to attend college education. This plan can hugely affect the future generation who would take loads of money in the hope of forgiveness. The current model for accessing loans needs restructuring. This is because students can access big and unlimited amount of loans without a repayment plan in mind. Lenders are sure to get their money since this loan does not apply for bankruptcy.
Those holding contrary opinions claim that Chambers (7) counter argues that going by the increasing number of petition who urge the government to forgive the student debt it is vital for the bill to sail through successfully. Stories cite the problem of unemployment, low-paying jobs, and an increasing debt hurt the students a lot. Some students in 2009 filed a petition that proposes the bailout for student debt (Congressman Higgins 1). These students propose this move on the reason that it will stimulate the limping economy. Other opponents to the forgiving of the student loan debt argue that college students are people in the society starting a new phase of life such as business start-ups, invention, and even families. These kinds of people when burdened with debt it can affect the quality of making decisions. Congressman Higgins (2) argues in favor of the students that the only resolution to avert this problem is to forgive students the loan debt since it is enormous in the face of harsh economic situations. Congressman Higgins (3) says that debt cancellation will ensure college graduates have money to spend. This money will support the ailing sectors of the economy. This is because consumer spending will enable entrepreneurs to create many jobs for many people. Those who propose to forgive the college claim that cancellation of debt will result in a simulative effect on the economy. Chambers (7) claim that forgiving students their loans leads to a dramatic increase in the number of educated people in the nation. Cox (14) says that a government should make loans accessible to increase the number of people who go to schools.
Rebuttals and Conclusion
Chambers, David L.. Debts, job choices, and financial burden: educational debts at nine American law schools : a study prepared for the Joint AALS-ABA-LSAC Task Force on Student Financial Aid. Washington, D.C.?: American Association of Law Schools?, 2013. Print.
"Congressman Higgins Votes to Pass Landmark Student Loan Reforms Historical Investment in Students, $61 Billion in Taxpayers Savings." States News Service [boston] 22 Mar. 2010: 1-5. Print.
Cox, Lynnette. Zero debt for college grads: from student loans to financial freedom. New York: Kaplan Pub., 2014. Print.
Fong, Tillie. "CITY AUDITOR QUESTIONS FORGIVING LOAN TO SCHOOL.(News)." Rocky Mountain News [Arizona] 15 Dec. 2004: 1-4. Print.
"Get out of debt: come back home: Revamped foundation to lure college grads by forgiving some student loans.." The News-Sentinel [NewYork] 26 May 2007: 12-14. Print.
Heller, Donald E.. Debts and decisions: student loans and their relationship to graduate school and career choice. Indianapolis, IN: Lumina Foundation for Education, 2013. Print.
Hoare, Steve. "How will tomorrowâ€™s nurses be able to repay their student debts?." Nursing Standard 26.12 (2014): 32-32. Print.
"New Report Shows Rising Level of Student Debt in America, Highlights Need for Legislation to Stop Student Loan Interest Rates from Doubling." States News Service [Chicago] 18 June 2013: 2-3. Print.
O'dowd, A.. "Medical student debts could rise to more than Â 70 000 under new rules." BMJ 341.oct12 3 (2014): c5723-c5723. Print.
"Schumer: The Late Andrew Prior's Student Loan Debt Has Been Forgiven - Two Student Loan Companies Commit to Pay off Syracuse Native's Debt, Just Days after Schumer Stood with Parents and Called for Companies to Do the Right Thing after Two Years of Foot-D." States News Service [Alabama] 25 Feb. 2013: 4-9. Print.