Americans need incentives to work, not deterrents | News, Sports, Jobs


Incentive to work.

Isn’t that something we need more of today?

So why are we considering allowing millions of people to default on their student loans, thereby discouraging them from working to earn money, pay off their debt, and be responsible and productive citizens?

Listen, we don’t pretend to know all the details or intracacies of student loan debt, and we agree that there needs to be changes to alleviate the $1.7 trillion in student loan debt in this country.

We understand that two years ago thousands of businesses were shut down by the government due to the pandemic and many of those borrowers were laid off, losing their means to repay their loans.

We also know that many businesses have closed permanently.

But now our unemployment rate is at historic lows, businesses are having tremendous difficulty finding workers, but the reimbursement requirement is once again being relaxed, delayed and removed in some cases.

And let’s be clear, borrowers face responsibility and legal obligation to pay their debts and they knew it in the loans.

The US Department of Education recently announced a number of changes to the federal student loan system — changes it says are designed to bring millions of borrowers one step closer to debt forgiveness.

Outstanding student debt in the United States exceeds $1.7 trillion, weighing more on households than credit card or auto debt.

More than 42 million Americans are in debt for their education, or 1 in 8 Americans (12.9%), according to an analysis of data from the May 2021 census.

Up to a quarter of these 42 million are overdue or in default. The highest amount is owed by people between the ages of 35 and 49 — more than $600 billion, according to federal data.

Recently, it was discovered that student loan servicers were not tracking how many payments borrowers had made under income-driven repayment plans, higher education expert Mark Kantrowitz recently told CNBC.

“The remaining debt is supposed to be canceled automatically”, said Kantrowitz. “But it’s not possible to do this automatically if the loan officer doesn’t track the number of qualified payments.”

To address this issue, the Department of Education will order repairers to retroactively count the number of qualifying payments, he said.

Moving to a current status should be automatic for borrowers, Kantrowitz said.

Collection activity, including wage garnishment and social security benefit offsetting, is also supposed to end.

Again, we return to the responsibility of borrowers to repay their debts.

Difficulties are and have been contemplated and repayment requirements have been and continue to be permitted.

But let’s start by tightening restrictions on borrowing – students should make firm commitments and shouldn’t be allowed to automatically borrow more money as they vacillate between study programs, prolonging their education and their debt. In other words, let’s think about a borrowing limit or limits to hold borrowers more accountable – theoretically preventing them from facing thousands and thousands of dollars in debt after graduation.

We’re sure you can feel our frustration when we consider people who have worked and paid their tuition and/or paid off their student loan debt. We agree with the concept of a “income-oriented (loan) repayment program”, that is, pay your debts according to your income. We have seen the value of delaying loan repayments when people have lost their jobs during the pandemic and a similar consideration when people’s income drops or they temporarily lose their jobs.

But education should not just be free. Income-tested repayment was first introduced by Congress in the 1990s and allows borrowers to repay their federal student loans based on their income and family size.

More than 9 million borrowers are enrolled in the programs, according to federal student aid data.

It’s just.

So let’s get to work and make it work.



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