October 1, 2012--Forgiveness
"Didn't we just agree to forgive some of our government loans to Egypt?" Al asked yesterday morning over coffee.
"I think we are considering doing that," I said. "About a billion dollars worth." He made a face.
"This is tricky business," Rona offered, always the skeptic. "If we do it for them, why not for other countries where we are trying to curry favor?"
"I guess it's evidence of our national magnanimity," Dave, more idealistically said. "To show people in poor countries who are struggling toward democracy that we support them."
"If we really want to do some good," Rona suggested, "maybe we should forgive some of the federal loan debt millions of our young people are burdened with. In the current economy, with so many recent college graduates unable to find jobs--any kind of job--wouldn't we give our economy a shot in the arm by doing this? As well as acknoweldging to young people who did what they were supposed to do that as a people we understand and want to give them a leg up?"
"These loans, which are guaranteed by the government," John noted, "were made by banks that we bailed out. Maybe as part of that deal we should have required them to write down, say, half of the outstanding balances. As a way to share the burden a little bit."
"I'm not sure how it would help the economy," I said, "But still it sounds like a good idea. In fact, it might be good social policy to forgive in advance a portion of all these loans. Not just outstanding ones but others going forward."
John said, "I just read in the Times that the percentage of these loans being defaulted, or with overdue payments, has been rising."
"I saw that too," Al said, "I think the default rate is approaching 15 percent."
"Didn't the GI Bill, which was a scholarship program for World War Two vets, contribute to the largest economic expansion in American history? That it returned at least five dollars for every dollar spent?"
"True," I agreed.
"So, there's your answer--how a loan forgiveness program would help fuel the current economy." Dave smiled.
"Republicans would never go for it," Al said. "If the Ryan-Romney budget plan ever got enacted they would cut not only the amount of loan money available but also Pell Grants. Over ten years, maybe in half."
"Which based on history," John said, "would be a really stupid, counterproductive thing to do."
"By doing this we might even attract better qualified people to become teachers," John added. "Another thing we desperately need. Kids graduate from college with so much debt that they can't afford to become teachers. If you owe $50 to $60,000 how can you afford to teach and make only $30,000 a year? With interest, you have to pay back $75,000 or so which means you're paying back your loans for as long as you have to pay back a mortgage."
"Tell me about it," Dave ruefully said, "I hate to tell you how much I owe."
Bringing it closer to home, none of us could think what to say.
"I think we are considering doing that," I said. "About a billion dollars worth." He made a face.
"This is tricky business," Rona offered, always the skeptic. "If we do it for them, why not for other countries where we are trying to curry favor?"
"I guess it's evidence of our national magnanimity," Dave, more idealistically said. "To show people in poor countries who are struggling toward democracy that we support them."
"If we really want to do some good," Rona suggested, "maybe we should forgive some of the federal loan debt millions of our young people are burdened with. In the current economy, with so many recent college graduates unable to find jobs--any kind of job--wouldn't we give our economy a shot in the arm by doing this? As well as acknoweldging to young people who did what they were supposed to do that as a people we understand and want to give them a leg up?"
"These loans, which are guaranteed by the government," John noted, "were made by banks that we bailed out. Maybe as part of that deal we should have required them to write down, say, half of the outstanding balances. As a way to share the burden a little bit."
"I'm not sure how it would help the economy," I said, "But still it sounds like a good idea. In fact, it might be good social policy to forgive in advance a portion of all these loans. Not just outstanding ones but others going forward."
John said, "I just read in the Times that the percentage of these loans being defaulted, or with overdue payments, has been rising."
"I saw that too," Al said, "I think the default rate is approaching 15 percent."
"Didn't the GI Bill, which was a scholarship program for World War Two vets, contribute to the largest economic expansion in American history? That it returned at least five dollars for every dollar spent?"
"True," I agreed.
"So, there's your answer--how a loan forgiveness program would help fuel the current economy." Dave smiled.
"Republicans would never go for it," Al said. "If the Ryan-Romney budget plan ever got enacted they would cut not only the amount of loan money available but also Pell Grants. Over ten years, maybe in half."
"Which based on history," John said, "would be a really stupid, counterproductive thing to do."
"By doing this we might even attract better qualified people to become teachers," John added. "Another thing we desperately need. Kids graduate from college with so much debt that they can't afford to become teachers. If you owe $50 to $60,000 how can you afford to teach and make only $30,000 a year? With interest, you have to pay back $75,000 or so which means you're paying back your loans for as long as you have to pay back a mortgage."
"Tell me about it," Dave ruefully said, "I hate to tell you how much I owe."
Bringing it closer to home, none of us could think what to say.
posted by Steven Zwerling at
5:43 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home