Last week I posted about the controversy over President Obama’s Stimulus Package and whether or not it was really “stimulatory”. I pointed to radio show pundits who were picking on various programs in the bill, including Obama’s plan to increase funding for student aid.
Well, if Dave Ramsey, Congressional Republicans and many Americans are critical of upping the level of the Pell Grant by just $500 a year, imagine what they’d say about two grassroots campaigns floating around Facebook these days to cancel out all student loans. That’s right — Robert Applebaum and Kevin Bartoy have both started Facebook groups calling for the federal government to forgive all student debt for college graduates making less than $150,000 a year.
Their argument? That the recession is as much a psychological problem as it is a numbers one. In other words, people aren’t spending because they are tapped out by their student loans (that’s the numbers part) and because they are afraid that the situation is only going to get worse (the psychological part). Forgive student debt, they say, and middle class families will suddenly have $500+ a month extra to spend on… stimulating the economy.
It’s an interesting idea and I have no doubt that an extra couple hundred dollars a month in the pockets of millions of Americans would go a long way to stimulating sales. But I have a question (and not that I think these ideas have a snowball’s chance in **** of getting anywhere legistlatively): What about those poor schlubs (er, I mean students) who are just now starting college? If we are going to forgive the debt of alumni, what about the loans of current (and future) students? Maybe all student loans should just be turned into grants? My brain can’t even wrap its way around all the zeros that would follow a plan like that.
You can find more information about Applebaum’s and Bartoy’s plans on their websites: Cancel Student Loan Debt to Stimulate the Economy and Stimulate the Economy — Forgive Student Loans (no more website). Or you can read more about the concept in Jon Chattman’s column Forgiving Student Debt Would Stimulate the Economy at the Huffington Post.
In the meantime, I want to hear what you think? Does forgiving all student debt for middle income Americans sound like a good idea to you? Do you think it’s fair? Do you think it would stimulate the economy like these Facebookers are claiming? Sound off FAF readers!