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I saw a debate here recently about student loans/forgiveness. It was interesting to see peoples responses in regard to Obama's statement about loan forgiveness. By and large the popular opinion was that it was the graduates responsibility to pay back.
This issue is affecting millions of young graduates and will continue to impact them for multiple years to come. First and foremost, loans cannot be forgiven outright due to the fiscal impact it would have on the crediting system. That said, more appropriate pay back options are necessary including retroactive shifting in the policy for private debtors. In 2005 student loan debt became one of the forms of debt that cannot be discharged in bankruptcy. It makes sense since there are no assets to put against outstanding student debt; one cannot take away the education a person has acquired.
These points above made, we are in a position where we must find a remedy. While debt burdens increase over $25,000 on average, the federal student loan debt is over $860 billion, and both the default and interest rates are at the highest they have been. Not focusing on a discussion on the need to make higher education more affordable, we need to focus on what this windfall will ultimately do to our economy from delayed buying power of graduates, depressed wages due to a stagnant economy. We are also faced with the possibility that a higher education bubble may pop when loans are more difficult to acquire, reducing both accessibility to higher education as well as the cash flow. Some would say is college necessary? The more relevant question is whether or not having a highly educated society is necessary in order to continue our growth in the global market.