With everyone from banks to automakers benefiting from the federal government’s bailouts, there remain gaps, with some groups receiving no aid whatsoever. One New York lawyer has a suggestion worth mentioning. Robert Applebaum believes that the federal government should cancel all outstanding student loan debt.
According to Applebaum, this would produce a far more dramatic effect on the economy and it holds the potential to be a powerful agent of financial stimulus. Those thousands of Americans paying hundreds of dollars each month on student debt would be able to put it back into the economy by spending it somewhere else.
Applebaum estimated that the amount of private and publically held debt in the U.S. has reached at least $600 billion. This figure, he says, is far less than the amounts that have been given to financial institutions that have went on to use it for inappropriate bonuses for execs.
Now the lawyer who is also paying for nearly $100,000 in student loans has taken his idea to the public. Back in January, Applebaum created a Facebook group that has now reached 156,000 people. With their support, he has orchestrated a petition campaign that he intends to bring to Congress. More than 40,000 have already signed the document. The goal is to present a plan to cancel all school loans in the United States.
The proposal has already encounter strong opposition from economists, many of whom dismiss the idea. Some however point out that one form of loan is forgiven then why not another, such as credit card debt or auto loans. How can such a proposal to forgive debt be accomplished when someone must end up paying. That is the question in the minds of many economists and financial experts.
For its part, the federal government has already been focusing the problems with student loan debt and the costs of higher education. In fact one of the government’s solutions to some of the costs of higher education will be addressed in July when a new income-based repayment plan is put into action.
This program will prove a cap on payments that is determined by the borrower’s income. The cap may average at 10%. Additionally, the government plan states that once a graduate has paid for 25 years, the remainder of the balance will be forgiven.
Other plans are being considered that involve answering the questions and concerns of the thousands of people across the country who now have student loans.
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If it wasn’t for school debt my husband and I could easily afford to buy a home.
I have been trying to fight this for years after paying much more that I requested and took advantage of all programs the accumulated interst has well surpassed the orig loan..i cannot afford and it is blocking my being able to get credit for anything. HELP
My son went to Berklee College of Music and graduated in 2004. The school was very expensive, but we were assured by the student loan department that all our loans could be consolidated and that the payments would only be about $400 a month. After graduation we were told that Signature Loans could not be consolidated. The interest rates are high and vary for each loan (go figure?¿) Our payments are $700 + and that’s interest only.
My son has been disappointed in the kind of work he’s been able to secure teaching music and had to eventually leave music all together. During the past two years he’s been without work a lot and we (the co-signers) have had to assume this burden. We paid $6000 last year and the amount on the loans has not decrease at all, because we are only paying interest. We realize that cosigning on our son’s school loans wasn’t a good idea, and that he paid far more for his education than he should have.
We also realize that the money borrowed has to be paid back, but what about all the excessive interest and extra charges they’ve tacked on causing the loan to balloon over $40,000 ?
Shouldn’t education be considered a right of citizens? Other countries provide free college educations. Americans are doomed to be slaves of the wage, many unable to ever pay off their loans or have homes.
We feel like the school and Sallie Mae have taken great advantage of our bad situation and we don’t know what to do. Who can help? Any advice?