US House Representative Hansen Clarke from Michigan introduced HR 4170, or the Student Loan Forgiveness Act, on March 8th, a bill that is extremely important in this economy, especially to the Millennium Generation. If passed, the bill would forgive outstanding student loan debt to any person who makes consecutive payments of at least 10 percent of discretionary income for ten years. It also includes forgiveness options for going into public service or teaching.
This bill could not come at a better time and in many ways is extremely overdue given that student loan debt now exceeds credit card debt and is set to surpass 1 trillion in 2012. Today’s recent college graduates (myself included) are faced with the worst job market post World War II, an ever increasing cost of living, and the highest rate of student loan debt in history. Rent, gas, and food are all substantially more expensive than 25 years ago when our parents were graduating from college.
The Project on Student Loan Debt reported that in 2010 two thirds of college seniors graduated with student loan debt and had an average debt load of $25,250, which would mean a monthly payment of around three hundred dollars. My generation also has a 9.1% unemployment rate and if we do get jobs, they are generally entry level and might not pay that much, at least at first. And people wonder why many of us are still living with our parents. News flash: it’s because we can’t afford to pay rent, student loans, and buy food and gas.
While some might question why the government is concerned about student loan debt, it really comes down to the economy. Given our substantial student loan burden the Millenial Generation is going to be spending less and holding back economic recovery. Think about it this way: if you have to pay 300 to 500 dollars a month you’re not very likely to be able to have a lot of spending money, let alone enough saved to buy a car or a house.
Personally, I have a decent paying job with a non profit in DC and after I pay my rent, utilities, student loans, put money on my Metro card, and buy food I’m lucky if I have two hundred dollars left over. Clearly I’m not going to be buying a car or house anytime in the near future, and am definitely not financially ready to get married, have kids, and start a family. I’m joined in this predicament by an entire generation overburdened with student debt. And while I applaud Representative Hansen’s idea and support the Student Loan Forgiveness Act, I don’t know if I can wait for ten years to have relief from my student loans.
While the Student Loan Forgiveness Act is a step in the right direction towards educational equality (why isn’t a free education a right, again?), it’s unclear whether it will even get passed in the House, let alone the Senate. Simply, the problem of student debt is far from solved and work is ongoing. For more information on the issue and what’s being done, check out Occupy Student Debt, the Project on Student Debt, and Forgive Student Loan Debt.