One Republican’s idea: Lets forgive all the student debt!

Michael Lux Best Of, Blog, News, Student Loans 4 Comments

Student loan solutions and legislation have traditionally been advocated by the Democrats; with Republicans opposing major changes and any additional spending.

However, a leading conservative website, the Federalist, recently published an article with a plan for Republicans to solve the student debt crisis.  The plan is quite simple.  Eliminate student debt… all of it.  Federal Student Loans would all be forgiven and the government would pay off all existing private loans.  To pay for this trillion-dollar solution the federal government would eliminate all grants, loans, aid, and support to post secondary education.  According to the author, the plan pays for itself in nine years.

Solving one problem by creating another?

Recent data suggest that a college degree has never been more valuable.  If the federal government cuts off aid to colleges and students, what will happen to future students with college aspirations?

There will still be a market for student loans because not everyone could afford the cost of college up front, but private companies would have to fill that void entirely.  As a result, getting funding for school would likely become much more difficult.

With less money to be spent on schooling, many colleges would have to either cut costs or close their doors.  Lower costs would be a benefit to all students who attended college.

The downside to this marketplace without the federal government is that many students would have no shot at college.  Students with no credit, and without a co-signer, wouldn’t be able to afford the price of admission.  The whole purpose of federal involvement in student loans is the belief that all Americans should have access to higher education.  The federal government exiting the marketplace would limit higher-ed opportunities for many.

A tough question of ethics?

For the millions of Americans coping with student loans, this presents a difficult question.  Supporting this approach could mean thousands of dollars in their pocket.  At the same time it would mean elimination of the very programs that made the opportunity to attend college a reality.

If you believe that the federal government is necessary for all Americans to afford college, can you support this plan in good conscience?

Readers:  Would you support this plan?  Why or why not?