It is time to make student loans dischargeable again.
There are several arguments that can be made for the ability to discharge student debt in a bankruptcy filing, but I believe that the strongest argument has to do with the economy in general. We are looking at an economy in which “full employment,” the rate of unemployment which most economists would consider to be normal, will go from four or five percent to around ten percent. We are looking at an economy in which credit is harder and harder to get. We are looking at minimum wage planet. How am I supposed to pay off $100,000 in student debt with a job that only pays $9 per hour?
The abundant availability of credit has kept this retail-based economy that we call “America” from feeling like a third-world economy has dried up. All that this huge expansion of credit has done is postpone the inevitable and the inevitable is occurring right before our very eyes. It has served as sort of a pillow between the harsh reality of globalization and what was the American Dream. Almost overnight, the purchasing power of the American consumer has been significantly limited and yet the banks continue to act as if we can easily pay on loans that were made before the collapse with the same inflation-adjusted stagnant wages that we’ve had since 1975.
It is time to stop the madness and live within our means. It is time for the former students who are currently paying on their loans to stop making payments. If I do it all by myself, I’ll continue to be in default, but if we all do it, then that’s a revolution.
Some may say, “Well, if you do that, then your credit will be damaged,” to which I say, “Who needs credit?”
Houses can be rented.
A huge investment in public transportation, including high-speed rail, and the designing of walkable communities can significantly reduce the need for the automobile.
All levels of education, from pre-K to PhD should be publicly-financed. And when the government begins to address Obama’s third policy initiative of education, we should all stand up and demand it.
With housing, transportation and education taken care of, what does the consumer need credit for? Do you REALLY need those shiny trinkets and fashionable clothes down at the mall? Then, do what others who are not able to get the credit you have do…save your money for it!
There is currently around $600 billion in outstanding student loans and right now, they have us enslaved by having us pay for something that should be considered a human right…the right to better oneself. But when we act together, that $600 billion becomes our weapon, not theirs.
Stop paying on your student loans until the government changes the bankruptcy laws…even if it means bringing the whole economy down with us.