Photo by DonkeyHotey | CC BY 2.0
Holders of student loans –most of whom are no longer students–carry a combined debt burden that stands at a record high of $1.5 trillion, more than 8 percent of GDP and more than the $1.3 trillion in direct costs of waging war against Iraq.
The Desirability of Cancelling Student Debts
The burden weighing like a nightmare, to coin a phrase, on 44 million indebted current and former students will haunt these people for a good portion of their lives. The average student debtor graduates owing close to $34,000 and is projected to spend 21 years paying it off. At present, the average monthly payment for those between 30 and 40 years old is $351.00. It is not uncommon for repayment obligations to be borne by underwriters of these loans, typically the primary borrower’s parents, grandparents, aunts and uncles. Taking these co-signers into consideration, we have about 100 million people adversely affected, directly or indirectly, by the difficulty very many have repaying these loans.
Because it is hard to have loans dismissed or renegotiated on the grounds of undue hardship, cases like the following are numerous: a 2008 graduate entered the job market with $50,000 in student debt. After the September meltdown he was laid off from his $29,000 a year job and had no choice but to default. His mother, a laid-off factory worker, had underwritten his loan, and so $120.00 of her $300.00 unemployment check was garnished in order to service her…