A new economic stimulus proposal has been suggested that would forgive debt accrued by college students nationwide.
This proposal, made by Robert Applebaum, founder and executive director of forgivestudentloandebt.com, calls for all student loan debt to be forgiven. Applebaum also created a group on Facebook called "Cancel Student Loan Debt to Stimulate the Economy," which has gained a following of nearly 228,000 members.
"This plan is a recipe for a sustained recovery," Applebaum said in an e-mail.
The Albany Common Council took the same idea issued in this proposal and passed a resolution last month by a unanimous vote. It urges the Federal Government to consider an economic stimulus plan that would erase student loan debt.
This is the first time any elected officials have considered such a plan.
The proposal suggests if students aren't forced to make payments on their loans, they will have cash to spend, which would stimulate the economy and give the flow of money in this country a steady push.
The proposal is meant to alleviate all outstanding student loans, making "no distinction between types of loans, undergraduate or graduate, public or private, whether the degree was obtained or not, whether in default or not."
The proposal made by Applebaum not only suggests forgiving student loan debt, but it also proposes a complete restructuring of the way students pay for college.
Applebaum believes the government should take a bigger part in paying for the higher education they have always encouraged people to pursue.
Several students on campus agree with Applebaum's proposal, saying they think it's a good idea for a stimulus package.
"It definitely couldn't hurt," said Matthew Degudicibus, one of several students who thinks the proposal is a good idea. Out of 15 students who were asked about the proposal, 10 said it sounded like a good idea and 11 said it would stimulate the economy. Five students said it was a bad idea, and four said they thought it would do nothing to stimulate the economy.
"Some people could take advantage of it," said student Liam Ward.
Todd Moravec, director of student financial services, has his doubts about such a proposal's success.
"Such a legislation of forgiving loans on a mass scale might be bad public policy," he said. "If you know you don't need to pay it back, you're going to go out and buy things, and taxpayers end up paying for these things."
Moravec said he believes forgiving students of their loans would inevitably lead to "reckless spending."
But reckless or not, it seems everyone from lawmakers to retail stores are calling for people to loosen the purse strings a bit and spend more money.
Why not give a little extra spending money to the younger population who seems the most eager to do just that?
Neal Duffy, associate professor of economics and finance, said he doesn't believe this proposal is the answer to our economic downturn.
"If you forgive these debts, where does the money come from? It's coming from tax payers, basically," he said.
Duffy said "money doesn't grow on trees," and printing money would cause inflation.
Similarly, taxing the upper-class more would merely result in a slew of unhappy taxpayers. He said "we should get back to conservative accounting principles."
Duffy said he believes this is just what the weakened economy needs.
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24 comments
What you say might be true in some cases. But please search your heart when I tell you I am white, and in an even worse student loan debt situation than you. At least in terms of how much money I owe. This problem in reality affects everyone who was ever stupid enough to be young. Who was ever stupid enough to learn how to put a signature on paper. As far as the people who ultimately profited from all this? I think they are from the Hippie generation. Which is Ironic. Probably white, but they ain't me.
What Came first? The Student Loan, or the Drug Addict, or the Alcoholic? Or all Three?
Happy Holidays
I owe two hundred and fifty thousand dollars. It started out as seventy five thousand in 1997. I can't sleep nights. Am terrified at times that I will be thrown in a debtors prision that will be fabricated. I don't want to grow old so much any more, because I have these strange fantasies from time to time of a squalid old age with a pittance leftover from Social Security and any other assets to survive on. I also had more strange thoughts today. After hearing a radio commercial for a life Insurance policy, I started wondering what would happen to the proceeds if I did buy a policy. Would the beneficiary get anything? If the money was garnished, would the Student Loan people leave enough for the cost of a burial so that my family wouldn't have to pay out ten thousand dollars or more? Perhaps the true benefiaciarys of the whole Student Loan situation are the people in the adult beverage business. But still that is no excuse for not staying sober, one indebted day at a time.