Student Loan Forgiveness: Why President Biden Got it Wrong!
So if you read this article and think it's about the $10,000, you are missing the point. Eventually, there should be some loan forgiveness, but not until the issues listed below are addressed. Unfortunately, President Biden throwing $10,000 at the problem now is just putting a band aid on a gash wound.
Student Loans - These predatory loans are offered to kids who have no assets, no income, and no understanding of what they are signing. There is no other debt that you can acquire without demonstrating an ability to repay the loan, yet we offer kids tens of thousands of dollars for their education (an intangible asset). In fact, the majority of their loan is not even for education. It's for room and board. That's like giving heroine to a drug addict. We have kids using borrowed money for coffee and donuts. They don't understand that the $10 they are spending in the student union will actually cost them hundreds of dollars in the next several years.
Rising Cost of Higher Education - This is kind of misleading. I'm not sure the "cost" of education is rising. In fact, it should be less with the technology available at our finger tips. HOWEVER, because so many kids are getting free money, and they don't understand personal finance, institutions feel they can charge whatever they want. You can't discharge student loans in bankruptcy, so there is no risk to Universities. They can charge hundreds of dollars for text books and t-shirts in the school store and it doesn't matter.
Penalizing Hard Work and Discipline - The biggest issue I see online is that people who worked hard and had discipline to pay off their student debts are now penalized for making what would ordinarily be considered smart financial planning. There are many people who chose not to take a loan in the first place. Whether individuals chose to pay off their debt or self pay for college, these families made sacrifices which should be rewarded. There is a reason why they are pissed. They feel cheated. They watched their neighbors get new cars and go on vacation while they paid off their debt and invested in college funds. I'm not sure how President Biden and Congress rectify this, but the American Dream is a promise that if we work hard, we should be rewarded.
The American Dream is not a guarantee. Hard work and discipline does not always pay off. However, we must not reward those who have made the wrong choices over people who worked hard and sacrificed. That's a slap in the face to the middle class. Having said that, I don't disagree with student loan forgiveness. I just believe the loan forgiveness should happen only after the issues above are addressed. If the issues above are not addressed, I'm afraid to say that the $10,000 won't even make a difference to the borrowers, since the cost of college will most definitely increase by a minimum of $2500 per year.
I urge those who read this to contact their elected officials. Even though I think the administration got this wrong, at least there was an attempt to address this issue. There are legitimate arguments on both sides of this issue and obvious compromises. Like most of the issues in this country, if we choose to work together, we can accomplish anything.
