First, let me say that I do not know the deep details of recent legislation related to student loan “bail outs.” I have read a few articles and it seems like there are new options for consolidation, new guidelines for income sensitive repayments, and the possibility to stop payments after a certain number of years. The last article I read stated that after 20 years of successful payments, any remaining balance would be forgiven.
A lot of people have (and will) cry “foul” and say this is just as bad as saving big banks and wall street executives. I can’t quite get there. On one hand, I certainly agree that being responsible for financial choices is important. A loan is something that must be repaid, whether for a car, a home, or school. On the other hand, I am someone who has a large student loan obligation and any relief would be welcome.
Was I irresponsible in my borrowing? Maybe. Did I see a better alternative? No. Like many students, I had find ways to finance my education on my own. I was living in a vicious circle: I wanted to pay for college without loans, but had a low paying job that barely covered my living expenses. I had a low paying job because I did not have an education beyond high school, so I wanted to go to college. But I could not save for college because I did not make enough money to make ends meet in the first place. You get the idea.
So, I have loans. Some would say, “well, if you can’t pay for it, don’t do it.” In reality, many middle and lower income students and families need loans. Without them, higher education would not be possible. To suggest that people who can’t “afford” college simply should not go is saying we should turn back the clock at least 50 years.
Not everyone who comes to college necessarily wants to. Often, it is seen as a “have to.” Of course no one truly has to, but even many entry level jobs now require a degree. And it’s not just a four-year degree that comes with big price tag. Those technical programs aren’t free. Some cost even more than a four-year degree.
So, I and thousands of others have loans. We take the risk and carry the burden because the other options seem worse. Would it really be so awful to give us a break? None of the legislation simply wipes out student debt. Income sensitive payments keep many borrowers from default and don’t punish people fighting a recession. People who do not pay will go into default, effectively ruining their credit score for years to come. I have been told it is far worse than a bankruptcy.
Perhaps there is a legitimate gripe with letting people “off the hook” after 20 years, but even that I question. 20 years is a very long time to pay for something, especially if interest is accruing. It’s nearly the same as a mortgage, in some cases. It could be more. There is no easy answer for the student debt problem. No college at all will mean a harder life for most people. Taking out the loans comes with risks, too. Which is worse?
