The $1.5 trillion crisis in student debt – encouraged and exploited by federal policy and a corrupt 2-party system – is an out of control drag on economic growth in America and a stress-filled burden for more than 40 million families. The average 2016 college student graduated with slightly more than $37,000 in debt. While calls for completely cancelling all student debt seem logical, a more realistic approach would significantly and more immediately reduce the burden of student debt.
I support proposed legislation HR 4001 Student Loan and Recalculating Act though I believe it does not go nearly far enough to boldly reduce student loan debt. I would support that Act (or propose a new one) with these eight amendments:
(1) Reduce the government student-loan interest rates to .07% from current levels (up to 7%) that far exceed market rates;
(2) Treat student debt like mortgage debt – expand the repayment time-frame to 30 years with tax deductions of both principal and interest; allow refinancing of student debt; and allow amended tax returns going back to 2008 to recapture deductions or tax credits for past student debt payments;
(3) Eliminate origination and all other fees on student loans; eliminate interest accrual on debt while students are in school; allow student borrowers in all healthcare fields to delay payment until two years after completion of internships and residencies;
(4) Streamline and automatically enroll all student borrowers of all ages in Income-Based Debt Repayment with minimum payments reduced to 3% of income with all repayment beginning two years after completion of degree programs;
(5) Expand Public Service Loan Forgiveness cancelling debt after ten years in all public service jobs;
(6) Reimburse tuition and debt payment costs for students exploited by for-profit schools now bankrupt and close loopholes in veterans benefits that similarly led to exploitation by for-profit schools;
(7) Fully support all state and tribal programs that institute free public college for all in part by eliminating all federal student loans by 2024 and diverting monies to free public education;
(8) Provide incentives to bank and private student debt owners to reduce interest rates to .07% on all student debts; provide and expand tax incentives to employers and industry groups that contribute to student loan repayment.
Final Comments: My son has student loan debt and I have medical debt, so I get this issue in a very personal way. And I am quite aware that the recent tax cuts for the wealthy and our most obscenely profitable corporations and their stockholders would have been enough to wipe out all student debt. You have to know by now I don’t just throw out visionary goals without a clear roadmap to get there. I would love your feedback about this roadmap to dramatically reduce the burden of student loan debt.