Does President Obama’s student loan debt forgiveness plan help to stimulate the economy?
The best way to describe President Obama’s student loan debt forgiveness plan is an income based repayment plan that will consolidate college student debt totaling around $1 trillion.
“Forgive Student Loans” is one of Occupy Wall Street’s strongest demands.
President Obama announced rules for the repayment of student loans earlier in November and told a group of students in Denver that higher education is essential to competing in the global economy.
“We want you in school,” Obama said. “But we shouldn’t saddle you with debt when you’re starting off.”
The rules will take effect next year and will allow students to roll different loans into one overall package with a lower interest rate.
In a 2009 article written by Jon Chattam for the Huffington Post he talked about Robert Applebaum, an attorney from New York who thought he had an idea on how to help many in his shoes while stimulating the economy at the same time.
The 35-year-old who started up an online campaign two years ago to help bail out those “hard-working, educated middle class” suffocating in college loan debt on Facebook.
He formed the group “Cancel Student Loan Debt to Stimulate the Economy” because he believes forgiving student loan debt for those making under $150,000 annually would help boost the economy from “the bottom up.”
“I struggle to pay my rent and bills and have never defaulted on my student loans,” he said Feb. 4 2009 “But I also don’t spend money on consumer goods anymore — not only because I can’t afford them, but because I’m afraid the situation will only get worse…”
Applebaum continued, “One-time tax rebates and meager tax cuts do nothing to stimulate the economy. A recession is as much a psychological phenomenon as anything else. Knowing I’d have an extra $500 per month in my pocket will get me spending again. Multiply that across the country and the economy will start to move again.”
There are still some groups who disagree with the reasoning of student’s debt holders and the President, like House Education Committee Chairman John Kline (R-MN).
In an article from the Think Progress website written by Pat Garofalo on Oct. 27 Kline states; “Sadly, the President has once again chosen to put politics before policy, touting a plan that will do nothing to help the nation’s unemployed workers…What this plan will do instead is encourage more borrowing across the board. That means more debt for students, more debt for taxpayers, and more red ink on the government’s books.”
Overall I think this plan is a great start to things that will help improve the economic status of the country. This plan will help to put money back into the pockets of the middle class and struggling educated working class American’s who deserve their fair shot of the American dream. This plan also helps the struggling business owners who have been hit the hardest by the economic downturn, and will generate some much needed spending in the country but I do feel that we have a long way to go to get our economy back to the thriving and consuming country that we once were.
