As I’ve indicated before, I’m not sure that the comments entered in these pages are readily available to anyone but me. What follows is part of a comment provided by a close friend, in which he noted a conceptual gap in what I had put forth in this post:
“I continue to find the student loan issue more vexing. There are studies that suggest that blanket forgiveness is regressive as the highest balances are carried by people of greater wealth and ability to pay. Is there a ‘way back’ or ‘earn back’ approach similar to your comments on immigration? One historical example … is student loan forgiveness [for teacher-borrowers that teach] in disadvantaged areas. There have to be many workable additional options.”
As a matter of principle, I absolutely agree, as our friend suggests, that student loan debtors seeking dispensation should provide consideration in return. A financial condition — which I have suggested is appropriate for illegal immigrants seeking a path to legal status — seems inconsistent where the intent is to relieve a financial burden. A requirement that the borrower seeking dispensation contribute hours within a wider menu of community services than currently included in student loan forgiveness programs – with such hours to be annually certified by the governmental and/or authorized nonprofit provider receiving the assistance — appears a way to provide taxpayers recompense for the student loan assets they are affirmatively waiving.
Since higher loan balances are generally held by those with a greater ability to repay – and by those who arguably should have been relatively more cognizant of the risks inherent in the obligations they were assuming – it also seems appropriate to limit the amount of debt that can be expunged. A January, 2021, post by Value Penguin (never heard of it; love the name; it came up in a quick internet search for student loan debt information) indicates that while the average student loan debt load – the statistic most frequently quoted — is almost $33K, the median debt load is $17K. Although I understand that President Biden campaigned on a pledge to expunge up to $10K of student debt per borrower, I would be willing to increase that to $20K if the dispensation was linked to a community service or some other verifiable non-financial obligation.