The Loan Arrangment: H.R. 4170

The Loan Arrangment: H.R. 4170

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Everybody wants a chance at a college education, but is the debt worth it?

Student loan debt in the United States now exceeds $1 trillion; an amount greater than the nation’s cumulative credit card commitment. U.S. Representative Hanson Clark (D-Michigan) introduced H.R. 4170, the Student Loan Forgiveness Act of 2012, on March 8, 2012.

If the bill passed, 10 percent of an individual’s discretionary income would be automatically withdrawn to go toward the repayment of federal student loans over a period of 10 years. After the allotted amount of time, the remaining balance would be forgiven.

Additionally, the interest rate on federal student loans would be capped at the current rate of 3.4 percent. Those individuals who chose a career in public education, public service, or practice medicine in underdeveloped areas would have their debt forgiven after only five years.

The numbers don’t lie—student debt is an escalating problem that needs to be solved. The situation unfortunately isn’t so black and white; the problem itself lies in the public university system, which is more like a business that’s operating in a time of economic crisis where the job market is brutal.

Universities are drastically raising their tuition rates, but is that money going toward the actual educational benefit of students? No, it’s going towards making the campus flashy so that more people, desperate for that sweet, sweet education they to get a good job, will take out loan after loan to give to their school.

It’s just as well, the amount of federal students loans being taken out would not be as high if many of the grants and federal financial aid had not been eliminated. The amount of financial aid a student has access to widely increase the number of people entering college.

Financial aid, which doesn’t have to be paid back, would increase enrollment more than high interest student loans.

People go to college to get their educations simply because they need it to get good jobs, and good salaries. $30,000 worth of loans looks pretty insurmountable when one’s primary form of interaction with the public is asking whether they “want fries with that.”

College graduates forced to work at fast food chains might not be able to handle 10 percent of their income getting automatically withdrawn to pay back all those loans.

A loan forgiveness plan is necessary, but there are myriad issues at hand that complicate the discussion. The rising tuition rate, severe loss of financial aid, and the troubling economy and job market are all things that need to be taken into consideration when discussing H.R. 4170.

Will it pass? Probably not. The banks –which we for some reason bailed out like a battered wife does an abusive husband, will lobby against it vigorously.

But should we give up on the idea of such a program entirely?

Some people cry “personal responsibility,” others scream “changing educational economic dynamic,” and others meekly pay their monthly loan bill, go to their dead-end jobs and die inside a little more each day.

We need a working educational system with a stable financial aid and student loan system to support its students. If we’re to be competitive in the global market, if we’re to leave our world in a better state than it was given to us, if we’re to have any sort of a bright future, educational funding must be key in our national dialogue.


Dakota Roberts">

Dakota Roberts">

David R. Barrera">