I was filling out a request for a forebearance from my student loans yesterday. I was thinking about how this is getting a little demeaning sitting here begging the government (mine are consolidated) not give me a little more time to get my finances together before I start paying them. I read about a petition online concerning student loan forgiveness. Groups are pushing the government to forgive all student loans. Ahh, I thought, that would be nice, wouldn't it? To be free of student loans?
Sadly, student loan forgiveness can't, and frankly shouldn't, happen. The money you are loaned does not magically appear, it is the result of investments. You cancel the loan and someone along the way loses that money, and who should be left holding the bag?
And this isn't completely heartless either. What do you think will happen to future student loans if they are forgiven? Who will invest in student loans? No company would touch them.
I don't have the numbers in front of me, but that pretty much leaves the government to take care of everything. If the recent debt problems are any indication, I'm not terribly confident they can or have any inclination to take over the student loan business.
I would benefit greatly from student loan forgiveness. Law school isn't cheap, and I haven't been very successful finding a job in my field. They do need to work on how they issue student loans however. Giving people realistic expectations of their earnings potential should be mandatory. If you are studying art history, you should know that the chances that you actually use the degree you are paying for are slim.
I heard somewhere that the student loan bubble is a lot like the housing bubble and when it pops, its going to be bad. Let's hope they figure out something to do about this, because I wouldn't want to see that happen.
What about you? Do you have student loans? How's it looking in paying them back? Think we should forgive them?