People are getting all sorts of emotionally tied up in the discussions about student loan forgiveness. But what many might be missing is just how insane the student loan debt has become.
Take the situation that Lauren Schreiber is facing. She now has $581,000 in federal student loans that were easy to get and the money given over without tough hurdles to cross.
Saying that the school and federal government facilitated handing out student loans like free crack would not be too hyperbolic.
We can blame Schreiber for the level of debt she is in from pursuing the belief that higher education is a great investment. She pursued her undergrad education and a chiropractic doctorate degree.
With her level of student loan debt, the annual interest alone is $40,000. With her current income, Schreiber qualified for an Income-Driven Repayment program, and it was calculated that her payment is $100 a month.
Her Loan Balance Grows $38,800 a Year
Even making the approved $100 a month payment, her loan balance grows $38,800 a year and will accelerate as the growing unpaid balance ages.
I Understand the Personal Responsibility Argument
Some people say the student is responsible for taking out loans they could not afford. I get it, but if we extend that logic, then the government should be responsible for extending loans, students would not be able to pay back.
Responsibility goes both ways.
What Do We Do About Parents, Society, and Counselors
On top of that, we fill people’s heads with messaging that says you must get a degree without considering the cost. People say investments in higher education always payoff, but they don’t.
So even before the student gets into debt, an entire network of well-intentioned efforts pushes students into a pit of financial trouble.
Parents are encouraging kids to go to college.
High school counselors are encouraging kids to go to college.
Society is saying higher education is the ticket to a better future. But is it for all the students that can never graduate and get a degree?
And then when it all goes pear-shaped, we blame the student. That’s misguided and ill-informed.
Let’s not forget the pressure of the for-profit schools commissioned salesperson or the non-profit school financial aid office’s facilitation to get the Benjamins.
I don’t think student loan debtors want a handout. I hear people saying they want a way out or a hand up to get out of this hole everyone put them in.
Student Loan Forgiveness or Bankruptcy
Student loan forgiveness is not a socialist handout; it’s a righting of a sinking ship.
We can be as angry and pissed off the passengers paid to board the Titanic but arguing that while the ship actively sinks will still leave the passengers drowning and dead.
The student loan ship is and has been sinking.
As I said recently, the more logical way to tackle this economic disaster students are carrying is to restore student loan bankruptcy discharge.