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A student loan perspective

By Ron Moore

As most of you have heard, President Joe Biden announced last Wednesday that most federal student loan borrowers will be eligible for some forgiveness: up to $10,000 if you didn’t receive a Pell Grant, which is a type of aid available to low-income undergraduate students, and up to $20,000 if you did. As tens of millions of Americans process the news of federal student loan forgiveness, countless questions are emerging about how it will all work?

Also, ultimately who is really going pay for it? The government? Really? You probably already know the answer to that because if the Biden administration hasn't taught the American People anything else, they have definitely taught us that nothing, I mean nothing is free.

Americans collectively hold more than 1.5 TRILLION in federal student loans which by way makes it the second largest category of consumer debt, trailing only behind mortgage debt. Here are some very interesting numbers, according to Education Department data, among the approximately 43 million student loan borrowers in the United States, almost 60% owe $20,000 or less, while nearly 25% owe about 40,000 or more. Also according to the College Board, in 2018, borrowers who graduated with bachelor's degrees had an average of $29,000 in student loans. Those earning master's degrees or higher tend to owe significantly much more.

We all have heard and very loudly partisan rhetoric and promises of some of the most extreme progressives in this country to just wipe out, cancel, and or COMPLETELY absolve student debt altogether. No one I know would not dare try to stand in the way of these multimillionaire pundits if they chose to with their own money to pay all of your student debt and ease the financial burdens that these debts may occur. If you have student loan debt, I know the sound of student loan debt forgiveness may sound like Mozart, and a dream come true, but perhaps it's really no more than another political ploy from the left to buy your vote just for them to remain in power. The ramifications of this could potentially be problematic. Here are a few reasons why.

First of all, if you borrow a debt, you should pay it. Most people are doing just that. The Consumer Financial Protection Bureau reports that 80% of borrowers pay off their student loans within 12 years of entering repayment. There are deferment and forbearance policies currently in place to assist with some of these repayment struggles. This incoming administration should be focusing on plans and solutions to get people back to work so that they can pay their debts, as most working people do, rather than tooting that "we'll just make it free" dog whistle. What about the student loan borrowers who have already repaid their student loans? S.O.L. for them I suppose. If taxpayers bail out student loan borrowers, because it's the actually the taxpayers that's footing the bill, these borrowers still have an economic benefit - namely a college degree - which can help them earn a higher income. However, one could say someone else besides the borrower has effectively funded that economic benefit for free, or nearly for free, which generally seems unfair because most people with college degrees tend to earn a lot more money than the average blue collar working class folk, like I said earlier, who will ultimately be taxed to pay the bill. Let's face it, everyone did not attend college and never took out a student loan,and if debt forgiveness is premised upon the idea that the current lending system is unfair, why should only one generation of borrowers benefit? This will create political pressure, as all “one-time” amnesties do, for repetition on behalf of future borrowers, who will be encouraged to think of debt as free money that will never need to be repaid. I also believe that complete amnesty of all student debt, which Bernie Sanders proposes, 1.6 trillion, would not only cause further social and economic divisions but in my opinion cause the feds to shut down government student loans altogether. Imagine what that would mean for the less fortunate that really need the financial assistance to go to college or technical school.

There are however some solutions that could help this situation immensely. Regulations should be put in place to keep tuition rates affordable reducing the need for student loans. Did you know that Notre Dame, not to single them out has an endowment of nearly 14 billion? yep with a B, yet they raise their tuition costs every year. Harvard boasts a cool 40 billion. Wow!! Are you starting to get the picture here? Lastly, maybe student loan repayment should be tied to some form of public service to relieve debt: i.e. teaching or practicing medicine in rural areas, or how about military service, yes SERVICE TO OUR COUNTRY which would be in my opinion one of the greatest forms of debt repayment.

I hope and pray that our leaders get this one right. So with that being said, I would respectively leave this familiar quote with you, "Ask Not What Your Country Can Do For You, Ask What You Can Do For Your Country." May God Bless You and May God Bless America.

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