WASHINGTON.
MINNESOTA.
MICHIGAN.
Soon, many more states may consider the Student Loan System saving plan-du-jour that has gained popularity since being unanimously passed in Oregon last July.
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| Pay-It-Forward claims to make a degree "debt-free" at state colleges and universities. |
Supposed benefits of the program is that students will no longer bear the burden of crushing student loan debt (although we have yet to know how credit scores would factor this index of poverty into their algorithms), students can pursue the field of study they love or want without consideration of low income after graduation, job loss would suspend payments, and underemployment would no longer be a problem because payments are a percentage of income.
It is a small step in the right direction to addressing the multitude of problems with the current system.
The biggest concession in the immediate and unanimous passage of the bill is the admission that the current system is broken, fraudulent, and most important, constitutes USURY.
Another concession implicit in the legislation is that we must begin to level the playing field to control the ever widening income disparity. By calculating payments as a percentage of the graduate’s income, we avoid doubly punishing disadvantaged students the way we currently do in so many ways (beginning with poor students having to take out onerous student loans in the first place).
However, as written, the program requires a $9 billion initial investment that will come from the state fund for need-based grants. Thus in order to begin to level the playing field, the program will take money from a need-based program for poor students.
There is still nothing in place that regulates and reigns in tuition increases that have far outpaced inflation.
While there seems to be a soft market pressure on schools to produce graduates that can compete in the workforce to repay a maximum amount, what is the actual connection? Will taxpayers end up paying the shortfall between rising tuition and what students can afford to pay back? Or is the hope that this will finally level off the annual tuition hikes?
Finally, while addressing the problem for future students, current borrowers are, once again, still excluded from any meaningful, life-changing student loan reform.
Ultimately, the Pay-It-Forward program fails in addressing the most underappreciated aspect of the Student Debt problem, and that is to acknowledge that education is a social good and therefore should be the right of all young people in a country that hopes to stay a free and powerful democracy.
What are your thoughts on the matter? Do you believe that the citizens of a free democracy need to be educated? Tell us what you think in the comments below!
