Monday, January 25, 2010

Student Loan Reform

The Obama administration has proposed a solution to the student debt fiasco. From Yahoo News:
Obama will also call for caps on some student loans, limiting a borrower's payments to 10 percent of his or her income, and forgiving all remaining debt after 10 years of payment for those in public service work — and 20 years for all others.
This cap and forgiveness program is similar to the student loan program in the UK. The model helps reduce some of the asymmetries associated with student loan debt (really easy to obtain, hard to predict rate of return, and almost impossible ability to discharge) by ensuring there is a finish line to the loan race and by encouraging people to obtain higher education.

I fully support such a system. Education, particularly legal education, is a huge financial gamble. The current student loan system relentlessly punishes those who lose the bet until the day they die. This alternative model better helps apportion the risk of obtaining an education. While the individual who ultimately receives the education gets the most benefit (and correspondingly, should pay for that benefit), there is a huge societal interest in educating the masses. Because both the State and the student benefit, they should rightly split some of the risk/cost. Simply loading the debt onto the student without the possibility of discharge ensures that such a student will be held back financially for the rest of his life (hard to get credit if you can't pay your $3500 a month student loans).

This is a sensible solution. Let's hope it goes somewhere.

20 comments:

  1. THERE IS A GOD! Thank you Obama...this is about the only good thing you've done.

    ReplyDelete
  2. Another Obama failure in my opinion (though it won't be if this goes nowhere)

    ReplyDelete
  3. I hope Obama gets this one done. I am not a fan of Obama, but he will win me over if he gets this passed. I'll buy my own health care if I get student loan relief. I do not like the 20 year deal becaise I am 46. I had to go back to school at an older age. I wish he woudl make it 10 for everyone and not pick and choose winners liek that. Heck, gov jobs pay mor than non-gov jobs...but, at leat it is a step.

    Now, allow us to put student loans on bankruptcy for thos who have already filed chapter 7 like myself and we can get some real stimulus. Hell, if I were able to discharge my student loan debts I'd actually be a productive consumer in society. Instead, I buy nothing and go nowhere...just work, home, watch some TV...Nice thes America...you go to school and you are worse off...I understand the logic behind not allowing student loans to be discharged in bankruptcy, but the logic is retarded. If someone qualifies for chapter 7, then that person is in financial ruin, not allowing student loans to be included just creates a situation where they go from pathetically broke to broke. It is hard to say wth a straight face that college pays off. Colle today only pays of for the lucky, those who picked the perfect major, or those who have college paid for by someone.

    ReplyDelete
  4. goose jackets on sale online sale Denmark Canada, UK,
    goose trillium parka jackets online sale Denmark Canada, UK,
    Canada goose freestyle vest online sale Denmark Canada, UK,
    Canada Goose Chilliwack Bomber sale online sale Denmark Canada, UK,
    Canada Goose Mens Citadel jackets online sale Denmark Canada, UK,
    cheap Goose Expedition Parka coats online sale Denmark Canada, UK,
    canada goose snow mantra parka online sale Denmark Canada, UK,
    Canada Goose Yorkville Parka Jackets online sale Denmark Canada, UK,
    womens Goose Chilliwack Parka online sale Denmark Canada, UK,
    womens Goose Expedition Parka online sale Denmark Canada, UK,
    womens Goose Kensington Parka Jackets online sale Denmark Canada, UK,
    womens Goose Montebello Parka jackets online sale Denmark Canada, UK,
    Canada Goose Womens Solaris Parka online sale Denmark Canada, UK.

    ReplyDelete
  5. Excellent article. Keep writing such kind of information on your page.
    Im really impressed by it.
    Hi there, You have done a great job. I will definitely digg
    it and in my opinion recommend to my friends.
    I'm confident they will be benefited from this website.

    My website: Nützliche Neuigkeiten über die glutenfreie Ernährung
    My website: Nützliche Neuigkeiten über die glutenfreie Essensweiße

    ReplyDelete
  6. My programmer is trying to convince me to move to
    .net from PHP. I have always disliked the idea because
    of the costs. But he's tryiong none the less. I've been using Movable-type on numerous websites
    for about a year and am nervous about switching to another platform.

    I have heard fantastic things about blogengine.net. Is there a way I can transfer all
    my wordpress content into it? Any kind of help would be really appreciated!



    My web-site bluthochdruck ernahrung
    Also see my site > indeed jobs

    ReplyDelete
  7. I am really grateful to the holder of this site who has shared
    this great piece of writing at here.

    Here is my web-site - gefängnis workout

    ReplyDelete
  8. I have been surfing online greater than 3 hours today, but I
    by no means found any interesting article like yours.
    It is lovely worth sufficient for me. Personally, if all
    web owners and bloggers made good content as you probably did, the internet
    can be a lot more useful than ever before.


    Have a look at my website ... steinzeitdiät
    My webpage - foods with no carbs

    ReplyDelete
  9. Amazing blog! Is your theme custom made or did you download it from somewhere?

    A design like yours with a few simple adjustements would really
    make my blog shine. Please let me know where you got your theme.
    Many thanks

    my page - paleo ernährung

    ReplyDelete
  10. Hello, i think that i noticed you visited my weblog thus i
    came to go back the desire?.I'm trying to to find issues to improve my web site!I suppose its good enough to make use of a few of your concepts!!

    Feel free to visit my web site :: carbohydrates diet

    ReplyDelete
  11. Remarkable issues here. I am very satisfied to see your article.
    Thank you a lot and I am looking forward to contact you.
    Will you please drop me a e-mail?

    Have a look at my webpage ... private rentenversicherungen

    ReplyDelete
  12. Hi there to every one, as I am in fact keen of reading this
    weblog's post to be updated daily. It contains fastidious information.

    Here is my web page ... paleoernährung
    Also see my web site - paleo bananen

    ReplyDelete
  13. It's the best time to make some plans for the future and it is time to be happy. I have read this post and if I could I wish to suggest you few interesting things or suggestions. Perhaps you can write next articles referring to this article. I want to read even more things about it!

    Here is my weblog: wordpress erste schritte

    ReplyDelete
  14. Hello there, I discovered your website via Google at the same
    time as searching for a similar topic, your site came
    up, it seems good. I have bookmarked it in my google bookmarks.


    Hello there, simply turned into aware of your blog thru Google, and located that it's truly informative. I am going to watch out for brussels. I'll be grateful when you continue this in future.
    Numerous other folks will probably be benefited out of your writing.
    Cheers!

    Also visit my web-site - Steinzeitdiät Rezepte

    ReplyDelete
  15. It's perfect time to make some plans for the future and it's time to be happy.
    I have read this post and if I could I wish to suggest you some interesting things or advice.
    Perhaps you can write next articles referring to this article.
    I want to read even more things about it!

    Review my weblog - käufer zahlt nicht ebay

    ReplyDelete
  16. Its like you read my mind! You appear to know so much about this, like you wrote the book in it or something.
    I think that you can do with a few pics to drive the message
    home a bit, but other than that, this is wonderful
    blog. A fantastic read. I'll certainly be back.

    My page; altersversorgung

    ReplyDelete
  17. Hi there, I enjoy reading through your post. I wanted to write a little comment to
    support you.

    Feel free to surf to my web blog ... katzen blog

    ReplyDelete
  18. Hi there I am so grateful I found your site, I really found you by error, while I was browsing on Yahoo for something else, Anyhow I
    am here now and would just like to say many thanks for a tremendous post and a all round
    exciting blog (I also love the theme/design), I don’t have time to read through it all at the
    moment but I have book-marked it and also added
    in your RSS feeds, so when I have time I will be back to read more, Please do keep up the superb
    work.

    my homepage ... arbeitslosigkeit motivation

    ReplyDelete
  19. Awesome things here. I'm very happy to peer your post. Thank you a lot and I'm taking a look ahead to touch you.
    Will you kindly drop me a e-mail?

    Also visit my web site - paleo kartoffeln

    ReplyDelete
  20. What's up, just wanted to tell you, I enjoyed this post. It was inspiring. Keep on posting!

    Review my homepage; lenkmatten fliegen lernen

    ReplyDelete

Note: Only a member of this blog may post a comment.