Let My People Go

With governments in virtually every developed country playing like it's 1933 (causing Paul Krugman to triple his anti-depressant dosage), I have a (totally non-self-interested) proposal that will make the economy grow in a chia pet-like manner: forgive student loan debt owed to the federal government.

The rapid inflation of tuition costs at universities has been driven in no small part by the fact that the amount of loans available to students always rises to meet these costs. Students are now graduating with more debt than ever before, debt which they must begin to repay 6 months after graduation and which cannot be discharged in bankruptcy.** Most of my friends are facing loan payments of between $250 to $700 a month. This will put a real damper on their ability to, well, buy things, things that would make the economy grow: houses and refrigerators and plasma screen TVs and whatnot. Currently, people may have federal loans forgiven if they work in certain public interest sectors--but only after they've made 120 payments on time. That would be 10 years of payments, after which the government might just think about maybe calling the rest of your loan a wash (for extra fun, which jobs qualify as "public interest" jobs is not specified, so you only find out after you've spent 10 years scraping money out of your probably very modest public-interest-job paycheck whether or not the government will forgive the rest of it. Good times).

A well-educated populace is a public good, no matter what the Republicans say, and it's irksome, to say the least, that students are held to their 30-year repayment plan while AIG fucks up and gets 100 kazillion dollars, or whatever it ended up being. So: forgive some of the loans when the student completes her degree (this is what the Dutch do--loan students money, but forgive the debt when the student completes college, thereby motivating people to both a) go to college and b) finish college. Those wacky Dutchies!) And the rest of the loans could be forgiven after the student makes payments on time for a reasonable amount of time, something perhaps less than a decade. These loans surely represent some very small proportion of government revenue, probably not even enough to pay for another super secret jet project or 1/2 of Dick Cheney's annual cyborg upkeep.

We will all solemnly swear to spend this money in a frivolous manner.


**I've always found this interesting. I suppose that the concern is that most students would graduate and immediately declare bankruptcy, before they get their grubby little hands on any real assets. Yet I can charge many thousands of dollars of useless items on my Citibank card and have them be dismissed in bankruptcy (of course, the generous folks in the government made it a lot harder to leave debt behind with their little bankruptcy reform--excuse me, "Consumer Responsibility"--act in 2004. For corporations, of course, debt is just another word for "don't worry, there's a bailout coming." Responsibility is for suckers who haven't gotten their own lobbyists.)