When I was younger I met a guy that was about 4 years older then me, his name was Johnathan. We called him Jonny for short. Jonny worked with me at a “dead end” job, I eventually befriended him and learned his story. Here is his story. Jonny came from a middle-class family in Redlands. He attended Cal State San Bernardino, where he had to get many student loans in order to attend classes every semester and get his degree. He graduated with a bachelor’s in English and $55,000 in debt. Jonny was a very smart guy, but he just could not find a job that would pay him more then the $14.00 an hour he was making now. So eventually his 6-month grace period ended, and he had to start paying his student loans back, soon he started to fall behind on his other financial responsibilities because he had to pay his student loans. He had to move back in with his parents, almost lost his car and in the end his credit score was hit very hard. This was 3 years before I met Jonny. Now at this point Jonny has given up with trying to get a good job and has become as alcoholic due to financial stress which led to depression. Is there really what we want the bright minds of our society to fall into if they can’t afford to pay back student loans? If we forgive student loans, real life tragedies like Jonny would never happen.
Student loans are a blessing for many people who would not be able to afford to go to college. They provide financial backing for these people to go to college without having to constantly stress on the thought “will I have enough money to register for classes next semester?” Student loans come in two forms subsidized and unsubsidized. The former does not accrue interest while the student is attending school. The later does accrue intertest while the student is in school. “The average student loan debt after graduation is $37,000.” (Gang 4) Imagine yourself just graduating college, what a joyous day! Now you start to think “I have a degree but roughly $37,000.00 in debt I have to pay back.” I know what you’re thinking $37,000.00 doesn’t sound so bad, but don’t forget the interest which is anywhere from 1-20% on the original amount borrowed. So back to imagining yourself after you graduated, wouldn’t it be nice to only have to pay back some or even none of your student loan? Well, there is, and these programs are known as student loan forgiveness programs to help you with getting rid of your student loans. So, let me show you why we should forgive student loans.
As a society we all benefit from people going to college and getting degrees, education helps us move society into the future. Most people do not want to be in debt and student loan debt “is now the second largest debt balance after mortgage indebtedness.” (McCarthy 1) Overtime people have come up with “forgiveness programs” for student loans. There are multiple types of programs available. Most of them do not completely pay off your student loans but can cut them down drastically. These programs are a huge incentive for people who want to go to college but must rely on student loans.
Let’s talk about the effect of debt, and not just the obvious that you owe money that you sometimes can not pay. Debt has many psychological effects on people. The effects include but
are not limited to “depression and high stress levels” (Chou) These psychological effects can majorly impact college graduates, especially newly grads. Imagine trying to find a job while being stressed out about being many thousands of dollars in debt. It will distract you from being able to completely focus. Now imagine that your going to become a teacher, public servant, doctor or joining the military. If you are going into one of these fields, you can get most of your student loan dismissed. Most of these programs do however require you to work for a minimum amount of time or a make a minimum amount of payments.
President Trump has already made changes to student loans and their forgiveness programs. Most of these changes are very beneficially for students, Trump feels that the government should not profit from student loans but does not completely agree with student loan forgiveness. Previously if a portion or all your student loan was “forgiven” then it would be considered taxable income. For example, when you went to go do your taxes if you made $60,000 from your job and you had $40,000 in student loan forgiven your taxable income would be $100,000. This could leave people with tax debt, what is the point of losing your student loan debt, just to gain tax debt? In the passed bill H.R-1 it states “(Sec. 11031) This section temporarily modifies the exclusion of student loan discharges from gross income to exclude from gross income certain discharges on account of the death or total and permanent disability of the student.” (U.S. Congress) Before this bill was passed if a student was permanently disabled the student would still owe his student loan debt. If a student were to die, his family would inherit their debt. This bill has eliminated permanently disabled or dead students owing their student loans. Another program that Trump improved to help with student loans is the Public Service Loan Forgiveness Program. This program has long been in place but was in danger of being thrown out. As a temporary measure Trump has extended the Public Service Loan Forgiveness Program. “The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.” (Public Student Loan Forgiveness)
I have shown you many facts about student loans and the negative impacts they can have before and after college. It can cause extra stress on top of the already stressful life’s we have that can easily turn into depression as you seen in Johnny’s story. I feel that as a society we can forgive student loans because the people who graduate college are very important to our society. If we did not have higher education, we would be a society filled with unintellectual people. So maybe next time a bill or law comes our way to help forgiveness of student loans. Think about all the negative effects of student loans and vote to help forgive student loans.
Chou, Eileen Y., et al. “Economic Insecurity Increases Physical Pain.” Psychological Science, vol. 27, no. 4, Apr. 2016, pp. 443–454, doi:10.1177/0956797615625640.
Gang, Liang. “Institutional Factors Influencing International Student Graduation Rates and Debt” 24 August 2018, https://etd.auburn.edu/handle/10415/6339. Accessed 28 October 2018.
McCarthy, Irene N., and Benjamin Rue Silliman. “An Earned Student Loan Repayment Program: A Tax Policy Proposal.” Journal of Business & Accounting, vol. 8, no. 1, Fall 2015, pp. 27–50. EBSCOhost, search.ebscohost.com/login.aspx?direct=true&db=bsh&AN=112921358&site=ehost-live.
“Public Student Loan Forgiveness” https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service Accessed 28 October 2018.
PR Newswire. “Subsidized Versus Unsubsidized Federal Student Loans – What’s the Difference? Ameritech Financial Offers Clarity.” PR Newswire US, 9 May 2018. EBSCOhost, search.ebscohost.com/login.aspx?direct=true&db=bwh&AN=201805090800PR.NEWS.USPR.NY90626&site=ehost-live.
United States Congress. “H.R.1 — 115th Congress (2017-2018)” 22 December, 2017 https://www.congress.gov/bill/115th-congress/house-bill/1