Would Forgiving Student Loans Stimulate the Economy?

WARNING: We are on the verge of a MASSIVE private student loan FIASCO in this country. Right now interest rates are at all time lows and only 40% are being actively repaid. Many of these loans have rates as high as 10% over prime. How on God's green earth are student loan borrowers going to pay these back when interest rates rise in the future??? As impossible as it is to pay back these toxic loans now, can you even imagine how painful it is going to be to pay them back when the interest rates rocket up to over 20% !?!? When these rates go into effect, YOUR BALANCE WILL DOUBLE EVERY 3-4 YEARS! This insanity needs to come to an end now. Congress needs to wake up now!!!

As someone who already owes a substantial amount of money in undergrad loans and needs to go to grad school for my M.A. to obtain a license to work in my chosen field, I think that debt forgiveness is a great idea. I agree Cryn, what's wrong with giving it a chance? If it doesn't work then we can go back to what we're doing now.

To the people who disagree and say that individuals in repayment need to learn that money doesn't grow on trees, what do you have to say about the insurance companies, automobile manufacturers, banks and other financial institutions who have been awarded billions of dollars by our government for their mismanagement and/or fraudulent acts? But it's okay for my hard earned tax dollars to go to them?!? Let's not even go into discussion about the amount of money we're spending daily on dealing with issues in the middle east.

With regards to budgeting and living within my means, I've cut every kind of expenditure that I could. Currently, I am living at home with my parents for a small fee (trust me, it's not really a hit with the opposite sex), work full-time as a waitress, and basically the only bills I have to contend with are my cell phone and car insurance bills and I still can't pay the nearly $1,000 payment every month. I have never been on a vacation and my one luxury of going out to see a movie once a month has been nixed because I can't justify paying $10 for something that I can rent when it gets released.

But what really infuriates and upsets me are the stories of fellow working class americans trying to better themselves and their families who are delving deeper into debt and despair as their loans go into default. Some individuals have even expressed that they are considering moving abroad because they believe it to be the only way to make a decent living or escape the stigma from loan issues. These are well-educated, hard-working, americans whose talents are going to be utilized by other countries when they could be doing good right here.

We raise our children telling them that they can be anything they want to be when they grow up, but when they become adults they realize that they can't afford the education to make their dreams a reality.

But in the meantime we'll keep rewarding billions of dollars to institutions who will squander it while we as a nation continue to sink further and further into debt.

Just another day in the land of the free and the home of the depraved.

This proposal is not a good idea. There is no quick fix to our countries economic state. Ya, it would be nice for the individual, such as myself that owes over $20,000 in student loans for just my undergrad. But, for the country as a whole it is bad news. Things cost money, education costs money. To have the government expect a boost in the economy from a multiple billion dollar higher education loan deficit is unrealistic when you consider the amount of money our government would have to put out to rid people of their personal educational debit. Especially since 99.9% of individuals do not pay off there student loans in one huge lump sum, but in monthly payments averaging $200. An extra $200 a month is not going to mean buying a new house or an extravegent new car. Cause, the essentials of daily living have a higher priority than luxury. During uneasy times people are also more apt to save a dollar here and then when then can verse spending it, to save for a rainy day. We all need to take responsibility for our own decisions. No one forced us to take out these loans. We determined that we should take out these loans. Loans are an investment within ourselves and our potential capability. Have faith in yourselves. And, just make sure you are not to live above your means. Budgeting is essential!

I think providing more subsidized loans would be a better route. I am in medical school and will have $250000 in loans when I am done.

I think that this would be good for the economy, not only today but in the future also. The phrase "Generation Broke" is going to fit most of these kids aged 18 to 28. As an example my two oldest children between them owe $147,000. for College on Direct Loans - Parent Plus loans, currently they have both graduated College and have gone onto Medical and Law school. The loans have been in forebearance, due to the fact that I can not make the $1100./month payment. My Son has 3 more years of Medical School/Internship, and my Daughter has 3 years of Law School. When they are through they were to divide the loans and make the payments. However the Federal Gov't will not give me anymore Forebearance, they suggest Deferrment Due to Hardship. However I do not think that I will qualify for that, they do not take into account your mortgage, bills, loss of pay, Etc. Etc. I am not a rich person, just a normal middle class homeowner who is struggling like everyone else. I've wiped out all of my retirement money also just to get them this far. If we can not figure something to get us thru the next 3 years we will go into default and then my Son who is a High School Jr. will never be allowed to get a loan to get to College. I know that there are other familys in this same predicament, this doesn't bode well for the youngest Children of those family's. Also the interest rate should be arounf 3 to 4 %, not the 7 to 8% that we are getting, does the Government not know that there is a recession and no jobs to be had? We just do not know what to do or where to turn anymore, and I have until the end of October 2009 to try to get something worked out. Any ideas from anyone out there would a big help.
Thanks

In my opinion, it is the less-privileged people who have to struggle with student loan repayment, and we bear that burden for a great part of our adult lives and some find it difficult to move ahead with this debt that seems to never go away. Even if the government cannot forgive entire amounts, forgive something substantial. We are the ones who will stimulate the economy the greatest if we have the resources to do so.

Way to repeat already old and stale statistics. Feel free to ignore the fact that some people can't find jobs that allow them to pay their student loans so they remain unemployed, therefore are not paying taxes at all. Don't mention that large amounts of student debt, whether they are in repayment OR forbearance/deferment, can prevent one from purchasing a car, or a house, or any other major investment.

Forgiving student loans now would not only immediately stimulate the economy, but it would provide a long term stimulus far into the future.

I totally agree with GlendaG44. I feel that we all need to stand up and take notice that it's not just about the current people in the world today but the children of our future! The past will continue to repeat its self if nothing is done about the reoccuring loan debt of thousands of Americans out there. The future is ours for the taking if we would only look at the future for what its worth not for the repeat of the past. STAND UP AND TAKE NOTICE AMERICA!!!!!!!!