Student Loans: Should We Forgive? Should We Restructure?

Student Loan Reform from the JimHickeyForAmerica.com platform.

Here are some of the things that I am hearing on the street during the 200-plus miles that I have walked door-to-door talking to voters....

Some students are thinking college might be too expensive, and not worth going, so they are thinking they will just try to enter the workforce. But unemployment is high, with many people are competing for the same jobs.

I believe this is the wrong mindset for our future leaders of the free world. America became great because our citizens were hardworking, educated people. To compete in a global world, we need to continue educating our citizens. Currently, only three out of 10 have a college degree, only six out of 100 have a master’s degree, and one of 100 have a doctorate.

Then some citizens believe we should forgive their student loans since they cannot find a job and cannot pay their monthly payments. I would love if my loans and my wife’s loans could be forgiven, but who would pay? Ultimately someone has to pay for this debt, and this would just be a Band-aid to a long-term issue.

Some parents' income are too high to qualify for student loans, and the family must get a private loan. I believe that the parents' income should not affect the student. We need to make sure everyone has the opportunity to receive higher education.

Some are fortunate enough to have saved and invested wisely to provide for their children’s education and do not need a loan. The parents could just pay off their child’s education, but I believe a better decision would be to invest in a business for the child after graduation or invest it toward their first home or give them an investment account. 

The Current Loan System

Here is an example of the current system: The monthly payment for a $40,000 student loan with an interest rate of 12 percent and a term of 10 years is $573.

My Proposal

I believe that since an education is a long-term asset, we should have a long-term debt associated with it. Also, the U.S. government borrows money by selling U.S. Treasury bonds so why not link the interest rate on student loans to the U.S. Treasury and cut out the middlemen?

Under my proposal, a $40,000 student loan, with an interest rate linked to U.S. Treasury interest rate 2 percent and a term of 50 years, would require a payment of $105 a month.

I believe we could “refinance” all current loans into this new system, and the savings would be on average $470 per student in the household per month. I believe this extra money would be spent in the local economy, and this could help stimulate local businesses.

Please visit my Web site to watch a video on this issue and many others, www.JimHickeyForAmerica.com.

Tell me what you think.