Today’s junior high and high school students are consistently being persuaded that college is the best pathway to a bright future. Plastered over virtually every school’s walls is a comparison chart that shows average expected incomes for high school dropouts all the way up to someone who has earned a doctorate. The trend generally moves upward with more education.
Even if students decide to pursue a more trade-oriented route and not go to college, they still will have to attend some sort of trade school to teach them the ropes of their chosen occupation. Just like college, these schools charge money for the privilege of attending classes.
It is for this reason that Hansen Clarke, a Democratic representative of the Detroit area, has introduced H.R. 4170; dubbed The Student Loan Forgiveness Act.
The text of the bill is written in typical legalese, but acknowledges the fact that in 2010 for the first time in history student loan debt has exceeded total credit card debt for the entire nation. The bill also asserts that student loan debt is on track to exceed $1 trillion by the end of this year.
The bill proposes a common sense approach to forgiving student loan debt. It provides that a person should pay “one-twelfth of the amount that is 10 percent of the result obtained by calculating, on at least an annual basis, the amount by which–‘(i) the borrower’s, and the borrower’s spouse’s (if applicable), adjusted gross income; exceeds‘(ii) 150 percent of the poverty line applicable to the borrower’s family size as determined under section 673(2) of the Community Services Block Grant Act”.” It also proposes freezing interest charged on Federal student loans at 3.4% So long as a person pays consistently at this level for ten years, the entire debt amount would be forgiven.
I have argued before that one of the best ways to improve the economy is by investing in education. This bill is a monumental step toward achieving the goal of a more educated populace that is better able to occupy the jobs employers in this country wish to offer Americans. The main reason some of these jobs are not offered to Americans is the fact that they simply are not qualified to fill the positions due to insufficient education.
Additionally, those who do go to college using student loans often find that the first bill comes in the mail almost immediately after they get their diploma in the mail. Instead of using their income to pay for a new car or any of the other things that might truly get the economy going, they instead limit their purchases to rent/mortgage, groceries, and utility bills, with most of the rest going to pay of their student loans. Hardly a prescription for economic recovery.
Relieving newly graduated students in entry level jobs of the extreme burden and high stress of making ends meet while repaying student loans makes all kinds of economic sense. They will either save their money to purchase big ticket items, or perhaps will use their disposable income to engage in idle pastimes that make life worth living. In either event, their spending of money that would normally go into the pockets of bankers, which will cause increased hiring, and eventually economic improvement.
Help convince the rest of the House of Representatives that this bill must be passed to the Senate and eventually the president. Tell Rep. John Kline, Chairman of the House Education and the Workplace Committee; the United States House of Representatives and Senate; and President Barack Obama that you want the government to support both future and current college students by signing an electronic petition here: