Student loan forgiveness has been in the news again recently with the White House announcing  $5.8b additional student loan debt relief for public service workers. Student debt has long been a contentious issue and it’s important to take a look at how we got to a place where 13% of the US population owe 1.73 trillion dollars in student loans. There’s been a lot of discussion as to whether this administration’s loan forgiveness plans are fair. We boomers have been talking heads, often disapproving of loan forgiveness because many of us, including me, had student loans that we paid off without any help. 

It is easy to forget what a different era that was and how tiny our loans were compared to today. Pretending that today’s students are facing exactly the same system and problems that we faced 30 years ago is the worst kind of self serving blindness that has helped to create this mammoth issue.

It was a long path to get to the place we are today and if you’re interested in the history of student loan debt, Last Week Tonight with John Oliver recently did an excellent program on the twisted path that got us here.

If 30 minutes watching that video is more time than you want to spend, here is a very short summary: Good intentions, plus corporate greed. plus naive 18 year olds, plus rising degree requirements in job postings, plus pressures on states to balance their budgets, plus rising tuition equals predatory loans becoming the only method many students find to pay for their increasingly expensive education. 

The bottom line is that the way we handle paying for secondary education in the US is a broken system where every possible solution has an attached problem. Some previous solutions which are still active today include complete forgiveness for some groups which neglects other groups, and federal Direct Consolidation Loans, which doesn’t include the most predatory private loans. 

The biggest and best change this administration has been able to make is to revamp the previous income driven repayment plans that were that had been complicated and difficult to apply for to a much better, fairer repayment plan. Today if you are accepted into the repayment plan, you will pay the specified amount for a specified amount of time, during which your principal will not increase, and at the end of which, your remaining balance will be forgiven. While this could be changed or removed in the future, it is a great plan for as long as it exists.

The biggest problem is that even if we forgive all 1.73 trillion dollars of outstanding student loans today, we have not solved the problem of new student loans tomorrow. 

So is this just another huge problem that is unfixable and not worth thinking about? The best thing that has happened recently is that President Biden has been keeping his campaign promise to tackle student debt and he has been making inroads to solving this huge problem despite a lot of resistance.  

The best solutions that I have seen are the ones that try to combine a few of the previous solutions. For instance there are suggestions of a blanket one time forgiveness of $5,000-$10,000 across the board to reduce the administration of the smaller loans, combined with one income driven repayment plan across the board where every outstanding loan holder is automatically enrolled and given a consolidated loan that fits their income situation and budget.

 Then we only have to tackle the “simple” problem of rising college tuition. If you or your loved ones are headed to college soon, it is worth taking a look at the movement toward free college tuition at the state level, countries level, and university level.

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