Writing in The Hill, Florida Democratic congresswomen Karen Bass and Frederica Wilson discuss their recently introduced Student Loan Forgiveness Act. The representatives argue for forgiveness of federal student loans as a way to help students suffering from the burden of crippling student loan debt. The bill is cosponsored by 39 Democrats and is currently in committee. Bills similar to the current legislation have been introduced, but have not passed the full House.
In their editorial, the sponsors argue,
"In Washington, we talk a lot about not passing debt onto the backs of our children and grandchildren — well there is no more immediate or direct debt on the backs of future generations than the amounts taken from their paychecks to payback increasingly expensive student loan debts. This debt is hampering their ability to contribute to the economic growth of the American Economy."
At the core of the legislation is a 10/10 plan that would cap monthly loan payments at 10% of a person's discretionary income, and limit interest of the loan to 10% of the original principle amount. After 120 eligible monthly payments, the act provides for tax free forgiveness.
But what happens to the debt that is forgiven? It will be passed along in some form or another, still burdening future generations.
Bass and Wilson are correct that the historically high levels of student loan debt, which surpassed $1 trillion in 2012, must be addressed. Students with this amount of debt are not able to contribute to the economy, purchasing cars or homes when the student loan debt often exceeds these amount needed to make such purchases.
What is not addressed in loan forgiveness legislation is the overall cost of college, which has increased substantially for students and for taxpayers. And there is a larger question of whether or not the money that is being shelled out for higher education by students and taxpayers is worth the price of admission.
The representatives argue that state budget cuts are to blame for the rise in the cost of higher education. They make the point that with their parents battling a tough economy, students have to take out more and more debt to handle the rising costs. Congress would better serve taxpayers and students by addressing the price of a postsecondary education. The rising cost of higher education has been an issue for much longer than the recent recession, steadily increasing for more than 30 years, and growing much faster than the median household income.
This legislation is a short term solution to a long term problem and shifts the burden of student loan debt to taxpayers, who already foot a large bill. College costs must be reined in and congress would better serve students by addressing that larger issue.