Student Loan Forgiveness Program Proposals:
1. General/complete loan forgiveness: This would eradicate any outstanding federal loans and immediately stimulate the economy by freeing up millions of dollars instantaneously.
2. Per-purchase/proportional loan forgiveness: If a person with federal loan debt purchases a car or gets a mortgage on a house, their monthly loan payments are deducted by the amount of the car loan or house mortgage on a monthly basis, to the extent that you have federal loans due. For example, If your car loan is $300 a month and your Federal Loans are $700 a month then you would be forgiven $300 a month of your federal loans. Therefore, you would pay $300 a month for the car and $400 a month towards your loan repayment for a grand total of $700 a month. If you were required to pay $200 a month in Federal Loans and you purchased a car with $300 then you your total Federal Loan debt for those months would be forgiven and you would only be required to pay your car loan at $300 a month. (The same principals would apply to a mortgage on a house.)
EMAIL YOUR SENATORS!
You can email your senator by clicking on the “Web Form” link below their name, find your Senator here: http://www.senate.gov/general/contact_information/senators_cfm.cfm
Subject of email: Student Loan Forgiveness Program
Dear <Senator>
In lieu of the Federal Government considering various ways to stimulate the economy by way of a “stimulus package,” I have thought of a way to immediately stimulate both the housing market and the economy in general. I propose a Federal student loan forgiveness program. The loans that students have across the country are preventing them from using their pay checks to purchase a home and to purchase various other goods in the economy. If the students loans were forgiven they would be able to use this money to stimulate the economy. This age group is also the ideal age group to ”bail out,” young people are traditionally spenders, not savers, if given the opportunity.
Thank you,
<Name>
Reasons why Student Loan Forgiveness would actually work:
1. The real estate market is desperate for first-time home owners. If college graduates were not encumbered with so much school debt they could stop renting and start buying.
2. The banking industry has recently been injected with capital by the Federal Government. Unfortunately, these banks still cannot find people/businesses which they feel would be a sound investment. If college graduates were not encumbered with so much school debt they would become much more attractive borrowers.
3. The automobile industry would also greatly benefit from college graduates having more capital at hand and thus being able to purchase new cars.
