I have known for sometime that student loans are eventually going to be a hot issue. After the economy begins to recover and the housing market truly stabilizes, Washington will need a new hot issue and one that is left to politicize will be student loan debt. Currently, the US federal government, depending on your view of the world, is helping people in need or rewarding people for failure and poor decision making. We all will hear about having a moral need to forgive student loan debt. It is currently a huge issue because as of March 2013, 51 percent of student loans were in deferment or forbearance according to this article on Marketwatch. Since, the federal government handles most of the student loads in deferment or forbearance, everyone will at least not see the drama of the feds trying to get external companies to be lenient as seen with Bank of America and other lenders for underwater mortgages. The government will actually in the long term have the ability to raise more revenue because interest accrues on the loans that are not being paid. Currently, there is a "Pay as You Earn" program that would allow one to pay off their student debt after 20 years of regular payment and 10 percent of their discretionary income. I do not have the details on how one qualifies for this program, but I still expect to see those will say that even this gesture is not fair and does not go far enough. My mind is perplexed to hear stories about how people spent 2-4x the salary of the career for which they went to college for. In many cases, the degrees are not even used at all. Many just went to college just to be there and did not come out with degrees specializing in anything.
I am sure many readers are asking, what is the point of me telling you this information? I would say that it is a memorandum on many things. One being that college education costs need to be brought under control much in the same way that federal spending needs to be brought under control. Another is that parents need to take a more active role in guiding their children into which careers they take and also to be much more studious in college selection based on price and location. Another is that is a heads up that taxpayers are going to have something else to look forward to in the coming years to pick up and this time the excuse will be worse than "I bought into a bubble" or "I bet the farm on a bad investment". Taxpayers can look forward to paying for people's experiences of getting trashed on the weekends, young juvenile behavior, and living it up way beyond means on college campuses. At the very least, the taxpayers should all get a copy of "College Kids Gone Wild" DVDs to at least feel they are getting something out of this whole mess.
