Last Updated on Tuesday, 18 September 2012 03:25 Written by Ebiz Tuesday, 18 September 2012 12:12
At first glance, the idea of the government forgiving student loans seems like a very intriguing one. At what better time could the forgiving of student loans hit? It seems as though it would be very lucrative to our selves as well as to the economy in general. In terms of fairness, who is more deserving than college graduates? After all, they are the individuals who chose to continue on in their education in the hope of making this country a better one in the future.
Robert Applebaum is an individual who no doubt knows the ins and out of this hypothetical situation very well. As the creator of the very proposal behind this idea, Applebaum is a major advocate for the bailout of student loans. The cut-and-dry proposal of the bailout would go as follows: The United State government provides to the American people a one-time bailout of student-loan debt and it turn, the economy is stimulated by the bailout. The current value (and savings upon the forfeiture of student loans) of the bailout is estimated at about $1 billion.
Applebaum himself has felt the economic pinch of student debt as he is about $90,000 in student debt. Having been there, he brings to the table some very good points in regards to college graduates and their role in the bailout. Once college graduates reach the point in their lives that student loans become a critical issue, they really ought to be doing productive things with their lives and not going into debt. College graduates are the demographic of individuals that society prefers to do things such as start small businesses, start families, and buy homes and cars. Individuals burdened with debt are less likely to be participating in such behaviors and actions.
To say that the American landscape would drastically change if these individuals were suddenly unburdened with debt would be an understatement. Applebaum notes in his petition the intensity of the glorious moment that these individuals are no longer strapped for cash, but rather empowered by their newfound financial flexibility. One can?t help but think that Applebaum is really onto something when imagining what a positive difference this potential bailout would clearly have on the economy.
Some experts brush the positive aspects of such a plan aside to look at the negative repercussions of the bailout. Since, at this point the bailout is hypothetical, it is important to look at both the possible positive and negative outcomes of the theory. Experts argue that this may not be such a wondrous financial aid to the economy after all. Who is to say that the individuals benefiting from saving this money will then put the money right back into the system? If we want to ensure money going back into the economy, we may as well give money to poor people who basically have no choice but to buy things and thus, put the money right back into stimulating the system. Possibly like the concept of payday loans; money going back into the system.
Moreover, experts are concerned with the inconsistencies of individuals who have already been making student loan payments, all of a sudden having been forgiven all debt owed. Furthermore, why should taxpayers, particularly those who never attended college in the first place, be funding the bill of the borrower?s education? How is this fair or ethical? Fairness is also compromised if the borrower can actually afford to pay their student loan, which some of them undoubtedly can.
There are no easy answers to these questions. Yet, this type of ing?nue thinking definitely deserves to investigated further.
Source: http://blog.ebusinessdebtrelief.com/debt/student-loan-forgiveness-fair-or-futile
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