All that said - there really does need to be some method of unsecured student loan forgiveness, as federal student loans never leave you. I don't have the answers to this, but it's not *everything is free for everyone, forever!*
I'll take a stab at that one, because I think a balanced solution is relatively simple compared to a lot of the other issues.
The problem I have with Bernie's plan is that it is (a) ruinously expensive, (b) doesn't treat all borrowers equally (it's a bigger windfall if you took on more debt), and (c) let's people escape an obligation they knowingly signed onto.
And specifically on that last point, because I can already hear Bernie's sans-culottes sharpening their guillotine, let me just say that I get it. Student loans suck. And I know a thing or two about it having gone to a private Catholic law school. But even though I all but guarantee I have more debt than anyone else here, I wouldn't support just wiping it off the books. I knew what I was signing onto when I agreed to that loan, and it's only fair that I pay it back. To say otherwise would be to support the proposition that there shouldn't be any consequences to my actions - instead I should just take a problem and sit on it until the problem gets big enough that the government steps in and fixes things for me, which is a stance I cannot get behind.
Having said that, I don't think the government is treating people fairly by charging what it does for a loan. Mine are all at 6.8%, which is higher than the current prime rate and way above inflation. In other words, the government is profiting off of these loans, but really the government is already getting paid back in the form of a better educated populace. This in turn helps to reduce the number of people who need social services and theoretically increases tax revenue as people are more likely to have high paying jobs. Taking interest on top of that is essentially letting it make profit twice over.
So rather than some scheme for responsibility-free loan forgiveness, how about just . . . lowering the interest rate on the loans? If you compare someone who borrowed $31,172 (the average per capita student loan debt in the U.S.) over 10 or 20 years at various interest rates, it can have a big effect over time.
|Loan Term||6.8%||4.75% (Prime Rate)||2% (10 yr. avg. inflation)|
|10 Years||$43,047||$39,220 (-$3,827)||$34,419 (-$8,628)|
|20 Years||$57,107||$48,346 (-$8,761)||$37,847 (-$19,260)|
If you took that loan over 20 years and the government charged only inflationary interest rather than the current rate, the borrower would save almost $20k.
This method isn't perfect, but it solves a lot of the issues I have with Bernie's plan. It will cost money, but it isn't nearly as expensive. It ties things to a percentage, so borrowers of different amounts receive proportionally the same benefit, and it also isn't providing a "get out of jail free card" - instead it's just putting people on equal footing with where they should have been had the government treated them fairly to begin with.
Anyway, that's a lot of text. It isn't the only solution, but it is a solution.
Or lower the taxes for the middle class? (graduates with a useful degree.)
“We’d love to have a 10 percent middle-class tax cut, and we would love to strengthen and make permanent some of other tax cuts.”