Brace Yourselves—Student Loans are Coming

SEAN NGUYEN
Staff Writer

For many college-bound seniors, there is a certain two-word phrase that will be the topic of heated discussion, deliberation and debate – “student loans.”
To many seniors, student loans may seem like a snake waiting to strike. In fact, for many students, student loans are often the only way that college is even a feasible idea. Truthfully, the question is no longer “How should I pay for college?” but rather “How am I going to pay back my student loans?” A recent congressional proposal titled the Student Loans Fairness Act (H.R. 1330) seeks to solve the issue of outstanding student loan debts, but does not actually address the underlying issues that cause such high levels of student debt.
The essence of H.R. 1330 lies in what the bill calls the “10/10 Loan Repayment and Forgiveness” plan. Eligible borrowers who participate in the 10/10 plan will have all their loans consolidated, meaning that the federal government will purchase any private education loans. Borrowers agree to pay an entire ten percent of their monthly adjusted gross income every month for ten years. After the ten year period, the loan is forgiven (up to a maximum of $42,520). Sounds great, right? Quite honestly, I’m not so sure.
There is nothing wrong with the idea of helping students resolve the debts that they incur as a result of their educational pursuits. However, as much as future me might like to take $42,520 off of his future debt, one must ask: Where exactly does the money for this come from? Because the government must actually purchase the private loans of participants for this plan to work, I cannot see the United States being able to maintain the plans outlined by H.R.1330 in the long run especially with the already enormous national debt that the United States is currently responsible for.
Some may argue that this is what our tax dollars are for! That spending money on making higher education accessible to students is something that we should all agree on. The issue with H.R. 1330 is that, by simply forgiving the loans and passing on the burden to taxpayers, universities are given a free pass to increase their tuitions to whatever they want. Universities do not have to care whether a student can pay for tuition because they receive the amount of money they ask for no matter what. Moreover, because H.R. 1330 essentially shifts the burden of debt to taxpayers, lenders no longer have to exercise as much discretion when they hand out loans because, again, the government is sure to make up for it if the student cannot. Simply forgiving student loan debt will not resolve the underlying issues of astronomically high tuition costs that have led to the current situation we are in.
It is recognized that the increasing sum of national student loan debt is an issue that should be rectified. Instead of attempting to pay for the constantly rising student loan debts of college graduates, the United States would do better to emphasize the opportunities of learning trade skills or pursuing other, less costly, alternatives to college. As attractive as simply forgiving student loans can be, the government of United States cannot afford to do so nor should it.