So it begins. After several years of ignoring the difficulties faced by students with over $1 trillion in outstanding loans and no way to repay them, the Feds finally face the music. Corinthian College, which included the well-known Heald College, recently failed after committing numerous ethics violations that amounted to defrauding its students. The US gov't has agreed to forgive student loans which it has frequently claimed cannot be forgiven. So much for that meme.
Heald college students are now eligible to receive student debt forgiveness, despite the often repeated mantra that these loans can't be forgiven, they must be paid off. What about the other colleges, the ones which may be legitimate but which are training candidates for jobs that just don't exist? What about the Arts Colleges that give degrees to artists who cannot be placed, as the Colleges well know. What about the Law Schools, which churn out candidates with law degrees year after year, thus contributing to the glut of lawyers already out there? Who should suffer for their duplicity, the students who legitimately want to work in the legal field? Or the colleges, who know how few jobs there are for their graduates? I believe the banks should suffer, since they are well aware of the low likelihood of adequate employment when they approve the loans, but they know the government will bail them out by paying the interest while graduates are unemployed.
The only way out of this dilemma is a two-step plan, one already approved by Clinton and Sanders:
1. Make colleges free.
2. Forgive all existing loans.
This plan would get the colleges out of the profit-making business. It would also free billions of dollars of debt which young people could use to start businesses or buy homes.
Right now, that $1.2 trillion in debt is being held by wealthy lenders, who refuse to forgive it. Let's put the money in the system back in the hands of those who will use it, consumers and entrepreneurs.