Student Loan Forgiveness Act Introduced in Congress

Sandra Khalifa
Rebuild the Dream / Video Report
Published: Friday 9 March 2012
“The bill provides that if a student loan borrower makes payments equal to 10% of their discretionary income for a period of 10 yrs, the balance of their federal student loan debt will be forgiven.”

Yesterday Representative Hansen Clarke (D-MI) released HR4170, the Student Loan Forgiveness Act. The bill aims to stimulate the economy and protect those struggling with their student loan payments.

Clark announced, “It’s time for Congress to stand for the rights of student loan borrowers. It’s time to forgive these student loan debts.”

The bill provides that if a student loan borrower makes payments equal to 10% of their discretionary income for a period of 10 yrs, the balance of their federal student loan debt will be forgiven.



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32 comments on "Student Loan Forgiveness Act Introduced in Congress"

bgrr

March 20, 2012 3:04pm

you people are short sighted idiots. Are you aware that the cost of education keeps people OUT of education? do you WANT an uneducated populace taking care of you and your children? Higher education is VIRTUALLY out of reach for millions of Americans (see Lanfear 1976's comment above -- and I understand your well-justified anger!), and the current and near-future economy simply does not provide jobs that allow people to work, pay bills, purchase homes and other items -- the things that run our capitalist engine. This ain't the 1950s, or the 1980s, folks. Without student loan forgiveness, we're looking at a labor future where everyone is living Lanfear1976's nightmare. Besides, student loan repayment is set up to take 20 years, which means 10 years of steady payments covers almost all of the principle -- forgiveness would cover a small portion of principle and the INTEREST (which is the profit that goes to Sallie Mae and Freddie Mac, and we all know how worthy THEY are. Or haven't you been paying attention?)

Lanfear1976

March 16, 2012 7:43pm

Then again....I am a single woman with no children. I don't QUALIFY for a government program of any sort. I just get to be homeless.

Lanfear1976

March 16, 2012 7:31pm

I can honestly see that the taxpayers are getting the shaft (pardon the language) but I have a law degree that took me 160K to get. I spent the 2 years after law school taking care of my terminally ill mother full time, with NO help and living on her retirement and whatever I could make on the side, which wasn't much. I took full loans on the assumption I would have good earning capacity when I graduated. Do you know how many firms are taking on 1st year associates? If you didn't go Ivy legue, DARN FEW. I was responsible with my loan money, I took as little as I could had I known how bad the economy would get, I would have structured my education differently. Now the ONLY way I will EVER pay off my loan, and I would like to, is if I win the lottery. I have 270K to pay thanks to interest accrual and I have a job that pays 36K with no benefits. Would I rather pay it off myself, yes. But I cannot even make enough to cover the interest. I will be upside down on this loan for the rest of my life, I will never be able to purchase a house, and short of a miracle I will die still owing. I pay taxes too, and I don't like freebies. But I don't really know WHAT else to do. I could be homeless on the government's dime I suppose. That would be good for the taxpayers.

concernedtaxpayer

March 16, 2012 5:50am

So, let me get this straight, a student takes out a loan, spends it on *whatever they want* and after 10 years of paying off 10% of their income, the rest is forgiven. These monies come from the government; our taxes pay these loans. I don't feel that the burden of paying for someone else's computer, car, cosmetic surgery, etc. should fall on the rest of the population. There are literally no restrictions on what student loans can be used to pay for, perhaps that should be a requirement before proposing a forgiveness. There are already stipulations in effect that do allow for student loan forgiveness, let's keep those in place and require stricter guidelines on what can be paid for with said student loans.

Lanfear1976

March 16, 2012 8:01pm

What kind of student loans were you talking about? I spent mine on rent, food, insurance, books, tuition, etc. They don't just HAND you blank checks you know. I can agree that stricter oversight might be warranted in terms of spending, but most people aren't blowing education funds on boob jobs. Sorry. As for existing loan forgiveness, only for an EXTREMELY limited segment of loans. I don't dismiss your concerns, I even agree with them. Why don't you tell me then how I pay my loans with the job market the way it is? I am honestly, and not sarcastically, curious.

CJHendrix

March 15, 2012 2:41pm

Well Said!

GBreault

March 14, 2012 6:18pm

Pay your bills. I didn't sign up for your loan. You did. Why didn't your parents raise you better?

Lanfear1976

March 16, 2012 8:07pm

My parents raised me quite well. I got my undergraduate degree with NO debt, while living at home, caring for grandparents, working full time, paying for my own computer and car and pitched in on living expenses. When I couldn't afford tuition I worked full time. It was a very different economy. My parents had nothing to do with my student loans, as is true with MOST student debt currently. Most loans are being taken on by adult re-entry students who are trying to compete in the job market so they CAN pay their debts, and feed their kids, etc. It is a lovely knee jerk reaction you have there....try thinking it through objectively and with FACTS please.

jwhitmore

March 15, 2012 10:36pm

Sounds like a lot of judgement, based on ignorance. Why didn't YOUR parents raise you better?? ;)

jwhitmore

March 14, 2012 4:33pm

As a current graduate student, I have dropped out midway through my program. Stafford Loans for Graduate Students have been taken away, as of the 2012/13 school year. We look forward to unsubsidized, 8.5% APR Grad-Plus Loans. I've got enough to pay off with the $100k education bill I'm stuck with...I don't want the burden of another $80,000.

The generations before us have been Takers. They have taken from the earth, toxifying our air, polluting our rivers, depleting our soil. They have taken from our Social Security to fund wars for corporate interest. Through incredulous CEO salaries, privatisation, and corporate lobbyists, they have taken from our economy by controlling the government. Jobless, Pennyless, Homeless, our once-great nation will be in our faltering economy as the multi-national corporations relocate in search of cheaper jobs, more available resources, and better tax laws.

Time for America to Wake Up! Our system is failing. Of, By, For the People? How is it then that we're all getting so screwed? Time to take our country back, and it's only going to happen with an educated population.

I support this bill, because I understand that our future depends on it.

jwhitmore

March 14, 2012 4:35pm

...

GjBNtB

March 13, 2012 3:54pm

How will the DI payment be derived? Will the DI be a snapshot in time, and one pays that much for the next 10 years, or will it be reviewed annually/semi-annually/monthly...what?I like the idea...LORD knows I could use some assistance with my 20 yeare old student loans that are atgrowing at 9% per year! Remember folks, once you consolidate (for whatever reason you did), your stuck! Now THAT sucks!- - especially when rates are now at 2 - 3%.GB

oldskoolgirl

March 11, 2012 5:01pm

Wrong. Students these says are often adults who cannot have their parents pay for their education. I am a 31 year old mom and college student who is racking up my own debt, and I am not alone. I see you are upset, but making a broad statement like that accomplishes nothing. Well, it shows that you are so angry that you cannot see past your own situation.

Dan Lozer

March 11, 2012 6:09am

Another reason: Education recently changed computer systems. We were informed in letters in February that not all payments were posted yet, don't worry. Now in March the same numbers are accompanied by a threat of garnishment. We need to end people being found guilty on the grounds of Education mishandling data on a five-year rotation.

Deborah Andolino

March 10, 2012 7:30pm

Smaller loans -- $10,000 -- can be just as hard on a family as the larger ones. My son is having 15% taken out of his pay every week -- he is a pharmacy tech and is paid weekly at barely over the minimum wage. The $160 a month may not seem like a lot, but, at our house -- we don't have cable, we don't eat out much, usually only when we have a coupon, etc. It's all in the perspective. Why couldn't the law read -- when the loan has been paid for 10% of the total? When I see the money that is spent during election season, I get sick to my stomach. Do you know how many students could be educated for the amount of just one campaign?? How many children in the poorer sections of this country could go to college? We have our priorities in the wrong places. However, we do seem to be a source of humor when other countries look at how much a student has to pay for a simple4-year degree. We need to step back and ask what is most important to us -- and then do something about it.

Geoffrey Mason

March 10, 2012 4:20pm

I thought that parents taught responsibility? We have mandatory universal childhood education in the United States -- why is making it easier to go to college an evil?

You people have no clue, or you hate America & Jesus. Great, you did it all yourself. So happy for you. I worked through my 2 degrees too, but I was also raising 3 kids. Now I make a good income, & pay taxes, but I have this mountain of debt that will not allow me to get a mortage, a business loan, or have the buying power that drives our economy. Most students today are not kids, they're adults going back to retrain as the economy shifts gears. If you had paid attention in macro, you would know this is the best way for an economy to recover. Moreover, most developed countries provide free college education. They know thats an investment in their future prosperity, & quickens the pace of recovery. I guess you folks want to live in a country filled with stupid poor people. Why do you hate America?
If you were a real Christian, you would love thy neighbor as thyself (Mark 12:31) & want to help the least among us as if they were Jesus (Matthew 25:40). If Jesus needed help with his student loan debt, would you whine selfishly about how hard you worked? You know just as well as I do but for the grace of God your circumstance could have been very different. Repent your sin of pride, & know that to whom much is given, much will be required (Luke 12:48). Jesus told us to pay taxes (Mark 12:17) so quit your whining & do so with the knowledge you are helping our great nation recover its strength.

You who do not like this idea should give the idea some more thought. Borrowers would have to pay 10% of their discretionary income for 10 years. If they have no income or can not pay 10% in one of those ten years, the loan, is not forgiven. The assumption is they will be able to pay anything at all. Online universities like Strayer take millions in federal loan money every year even though they know their (generally lower income) students have the highest default rate among all universities.

PoorDumbPawn

March 09, 2012 8:15pm

So the schools will simply not get paid the balance of the loans? So won't they just raise tuition to make up the difference? And doesn't that end up doing much more harm than good, since even fewer students will be able to afford the higher tuition?

What's wrong with being responsible, and paying what you agreed to pay?

Frankly, 10% over 10 years isn't barely even *trying* to pay off a loan, if you ask me...

No, poordumbpawn, the schools still get paid. Take some economics classes, or just google "loan forgiveness".

TheodoreRooseve...

March 09, 2012 8:05pm

Mike, do you have ANY concept what "forgive" means? That's a PC word for "you pay for my debts"! Why don't we give all our money to the government so they can give everything to everyone for free. Of course if that were the case, only stupid people would be working or starting businesses. Then the government would have to wave the magic wand and pull more funny money out of the hat.

It took me six years to get a four year degree SINCE I EARNED THE MONEY MYSELF TO PAY FOR COLLEGE. I worked in between studying. I took responsibility and incurred no debt instead of partying away on "free" money. Now I get to pay for someone else's debt? Does this sound reasonable?

I purchase a home that isn't stretching my budget beyond what I can afford. I make sure I have savings in case of emergency or loose my job. My house has lost value, but I still pay the mortgage every month. Can't let those morons that supposedly were dupped by the banks loose their homes, though. Why don't I pay for yours AND mine. Punish me for being responsible and exercising a little common sense! Does that sound reasonable?

Lanfear1976

March 16, 2012 8:14pm

I got my BA on my own to, and I am rightfully proud, as you should be. I took loans for my graduate degree and I was very responsible with those funds. I didn't party on "free" money, I worked my ASS off to get good grades and graduate. I would love to pay my loans myself...as soon as you tell me how when the only job I can get in the current economy, with a LAW DEGREE, only pays 36K with no benefits and I cannot make basic interest payments? I will be upside-down on my loan until I die. I save money, I don't spend, I don't have credit cards and without my family spending their hard earned money to help, I would be HOMELESS. I am not some irresponsible mooch. Please....judge me you sanctimonious man, AFTER you stand in MY shoes.

I worked and took out a loan to get my masters and paid it back. But things are different now. The rates of interest on student loans these days are completely usurious. It's very difficult to re-pay them, especially when you get out of school and enter a job market like this one.

Barack and Michelle Obama were still re-paying student loans until just about the time he got into the White House (the book sales may be what allowed them to repay them).

Our system of education needs an overhaul. In this economy it would be very difficult to find a job that could pay for school. And it doesn't make sense to have young people forced into a lifetime of debt in order to get an education.

PoorDumbPawn

March 09, 2012 8:26pm

Right on, Teddy. And those capital letters "EARNED THE MONEY MYSELF FOR COLLEGE" are rightfully proud.

And there are plenty of us responsible adults out here, rightfully ANGRY at all those others who never seem to have to pay the same dues we do...

sickofsmug

June 06, 2012 1:28am

My suggestion is that you remember Maslow. These are very different times we live in today. The U.S. government helps many countries with our tax dollars; yet we are the only free country where student pay for a post-secondary education.

What is wrong with you, your comment and your thought process.... I pay for three people in my household to attend college; while on Social Security and I will owe until the day that I die. We are all medical student my medical malpractice insurance alone is $250,000 per year. I was responsible enough to raise three children alone, put them through school and on to college. The cost is $109,000 per year, earn and go to school today; bet you can not and maintain a 4.05 GPA.

In my field opinions only count when they are helping to save a life, and not beating one down. Oh and by the way the stipend that financial aid gives usually runs me about $1300.00 and the last I checked my PDR was $698; so no boobs for mama.

Lanfear1976

March 16, 2012 8:31pm

Some of us who would benefit from this bill DID pay those dues thanks. I was UNPAID primary care for 3 relatives (until they passed) for over 10 years while getting an undergraduate degree (with NO loans) and for 2 years after my graduate degree. Exactly HOW much more of a responsible adult do I need to be? I have no credit card debt, my car is 15 years old and paid for and I get NO assistance from the government. I STILL cannot pay the debt. Judge when you have STOOD where some of us are please....lest the "dumb" in your name be held as truth.

artyst31

March 09, 2012 3:30pm

First of all - students do not any longer get loans themselves. It is a "Parent Loan". Parents are mostly baby boomers who are reaching retirement, under employed or unemployed. The students have no jobs waiting for them or ones they are paid terribly for and can barely get by on. So parents- like me - are stuck paying or getting a lifetime of good credit ruined and like me, NEVER being able to retire. I have lost everything - my home, my retirement fund, my business and no one bailed me out like they did the banks!

oldskoolgirl

March 11, 2012 5:06pm

btw, this comment was meant for you: Wrong. Students these says are often adults who cannot have their parents pay for their education. I am a 31 year old mom and college student who is racking up my own debt, and I am not alone. I see you are upset, but making a broad statement like that accomplishes nothing. Well, it shows that you are so angry that you cannot see past your own situation.

justmyopinion

March 09, 2012 3:10pm

First off it doesn't teach responsibility. If you take out the debt you OWN the debt. If I had had a program in place like that I may have chosen a different degree like medicine. I would have taken me about 10 years to go through including the residency and I would have made sure to pay 10% during the residency period so that when I actually started to practice I would have had only a few years left to pay the nearly $250,000 I would have amassed in debt. Sounds like a winner for some, but maybe not the American public.

patrizio

March 09, 2012 2:30pm

I agree with Mike. Why not just give them the money! Very few repay the debt anyway. This is the era of 'Of course I'm entitled'. No way are they accepting and no way are we teaching RESPONSIBILITY.

Lanfear1976

March 16, 2012 8:35pm

When did you get your degree? Your graduate degree? Do you know what they COST now? What is your current education level and job? Can you GET any kind of a decent job without one? I take my responsibilities seriously, try looking objectively at facts and then talk. I won't deny that from the view of a taxpayer (which I am TOO), this bill SUCKS. But I will never be ABLE to pay my loans off short of winning the lottery. You find me a way to do it on my salary and I will. Smiling happily.

Mike Villano

March 09, 2012 12:43pm

Good idea since a lot of economists are predicting the next crisis will be the huge debts these kids have and will more than likely not be able to repay.