Lawyer Suggests Idea For Student Debt Forgiveness

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.

Related Articles

• Programs Looking To Ease Burden Of Student Loan Debt
There are two Federal programs that have been established to relieve student loan debt for those recent graduates who may be struggling to find a place in the flagging employment
• ‘Til Debt Do Us Part: Breakups Caused By Money Problems
Allison Brooke Eastman's fiance was ready to walk down the aisle and commit to the wedding vows. Until he found out how much debt she had. Turned out when he
• Big Changes To Student Loans
The majority of college students graduate with more than a degree-- they also leave school with a big pile of debt. Here are some recent statistics:Two out of three four-year
• College Students Face Trio Of Problems
College graduates are dealing with more debt and hiring slump-- which is not a great combination. Nevada-based 8 News Now interviewed college student Raven Reid, who spends a lot of
• New Study Shows Credit Card Debt Lower New Business Survival Rates
According to a recent study that was conducted by the Ewing Marion Kauffman Foundation, there is a possible correlation between credit card debt and reduced viability in small business ventures.