The Next Bailout: Cancel U.S. Student Loans

The Next Bailout: Cancel U.S. Student Loans
March 08, 2009 08:30 PM ET | James Pethokoukis | Permanent Link | Print
Have you heard about this Facebook group, "Cancel Student Loan Debt to Stimulate the Economy"? It has more than 108,000 members. Here's the idea from the group:

Some of us have taken advantage of Federal Stafford Loans and other programs, including private loans, to finance higher education, presumably with the understanding that an advanced degree equates with higher earning power in the future. Many of us go into public service after attaining such degrees, something that's also repeatedly proclaimed as something society should encourage. Yet, the debt we've accrued to obtain such degrees have crippled our ability to reap the benefits of our educations, causing many to make the unfortunate choice of leaving public service so as to earn enough money to pay off that debt. ... Instead of funneling billions, if not TRILLIONS of additional dollars to banks, financial institutions, insurance companies and other institutions of greed that are responsible for the current economic crisis, why not allow educated, hardworking, middle-class Americans to get something in return? After all, they're our tax dollars too! ... Forgiving student loan debt would have an IMMEDIATE stimulating effect on the economy. Responsible people who did nothing other than pursue a higher education would have hundreds, if not thousands of extra dollars per month to spend, fueling the economy NOW. Those extra dollars being pumped into the economy would have a multiplying effect, unlike many of the provisions of the new stimulus package. As a result, tax revenues would go up, the credit markets will unfreeze and jobs will be created.

Me: I can't believe no one thought of this earlier. This might have some legs. Of course, the people who worked and saved their you-know-whats off to pay their kids' tuition might not be too pleased ...