Tuesday, February 05, 2013

Definitely a Problem

I don't know that the housing bubble is the correct analogy for the student loan clusterfuck, but I suppose it references something people have some sense of scale of.

There are some fixes that would be hugely beneficial: the ability to have student loan debt written off in bankruptcy, no federal backing for private loans, caps on annual loan amounts for federal backed loans (maybe $10k/year for tuition plus some sliding scale for living expenses of up to maybe $15k/year, with most places being limited to $5k or so), probably a few other things.

That doesn't really deal with the problem of existing/outstanding student loan debt.  I like the idea of a structured, massive, one-time forgiveness plan.  It could be something like the stimulus idea(s) I've put up here before, or just a dramatically enhanced version of the slightly-better-than-it-used-to-be student loan debt changes Obama put through (pay a max of a certain percentage of your income, and all outstanding debt forgiven after, I think, 20 years).  Making student loan payments fully deductible rather than just interest (yes, I know, I hate deductions, but it's how we roll)--also maybe raising the income limit at which you can no longer deduct--and lessening the payment forgiveness term to 15 years would be a start, reducing the max payment amount to 10% of income, or at least by a point or two would also be nice. 

1 comment:

Anonymous said...

Hey there! I've been reading your site for a long time now and finally got the courage to go ahead and give you a shout out from Atascocita Texas! Just wanted to tell you keep up the excellent work!
my page :: Erotic