Defaulting on student debt is akin to cheating. I’m sure there are many deserving hardship cases, but I’m also sure many defaulters have had a pattern of cheating and gaming every angle of the system they can find.
A general release from student loans is a very slippery slope and we should think twice about a better philosophy of approach. It’s also terribly disrespectful to all those students/families who worked hard, paid their debts, and followed through by the rules. Ditto for home mortgages. A general release from debt rewards the cheaters for successfully gaming the system by simply slow-walking the lending institution until somebody (Parents? Federal Government?) bails them out. Until our government makes college free for every student, we have to be the adults in the room and seek a reasonable balance between compassion on one hand, while making students/families accountable for their debt on the other.
Maybe there’s a better way? There are plans to reinvigorate the concept of a national service for graduates — e.g., Peace Corps, Americorp, et al — and a student in debt can volunteer to do some good work and in so doing, volunteer-off their debt over say, five years: long enough to fairly reduce their debt, but short enough so they can see the light at the end of the tunnel. Most adults have some measure of volunteer activity their entire lives to give back and help out (church, soup kitchen, hospital, kids sports…) so what better time to start!
In addition, a student could change their daily Starbucks coffee order from a Venti to a Tall, save the difference, and that will pay off $5,000 before they begin to think of getting married and having a kid.
And part of this payoff contract should be a requirement to complete online courses in financial literacy to give them the tools they need to successfully navigate their financial lives without another debt disaster.
Unfortunately, disaster has already happened for thousands of students and parents. Together, the students and parents must face this issue head-on and be accountable and if they can step up to that challenge, maybe a United America can help out in a way that does not overburden students’ lives in the process.