Here is an idea for equitable student loan relief, one that is based upon a reciprocal notion of receipt and contribution necessary for a healthy society. It is a two-step proposal:
A Baseline Forgiveness Amount For All Student Borrowers.
Since students that attend public universities and college tend to be the least well off, there should be a basic amount that is available to all student borrowers. It should be based upon state residency. The formula is actually quite simple: based upon the average tuition of the level of schooling attended, a borrower would receive forgiveness in the amount of the tuition of the average state school. For example, if a New York student has completed a four-year undergraduate degree the forgiveness amount would be equal to the average of tuition and possibly room and board for that period of time. If a student from Michigan completed an undergraduate degree and law school, the forgiveness amount would be equal to the state tuition for that period of education. This forgiveness amount would be universal and without condition.
For Those Seeking Loan Forgiveness Beyond the State of Residency Tuition Average.
Forgiveness for a student borrower who has outstanding loans that are stressful coming from attendance at elite school such as a Georgetown or an Ivy League institution should not be excluded from a form of forgiveness, Any balance beyond the baseline forgiveness amount described above can be earned through government service. For example, loan forgiveness can be measured against service time in one of several institutions such as the Peace Corps, AmeriCorps-VISTA, military service or even a rekindled Civilian Conservation Corps.
The amount of forgiveness can be measured against blocks of time served. In cases of advanced graduate degrees, earned forgiveness can be calculated by volunteer time based upon special skills that are needed in given parts of the country. For example, a medical school graduate might have part of his loan forgiven by the government in exchange for a given period of service in a rural or depressed urban area. Again, the forgiveness amount would be calculated by the difficulty of the assignment as well as the blocks of time (say six months) of service.
This is neither charity nor a giveaway. It is progressive liberal economics squarely in the spirit of both FDR’s New Deal and JFK’s New Frontier. These two options would not be open to any serious conservative GOP attacks. It is exchanging forgiveness for public service. Service is also beneficial to those seeking forgiveness. It would provide practical experience in a chosen profession. Any such program must also address the issues of predatory loans and drastically inflating tuition costs in the past half century. Why has the cost of college education well exceeded the rate of inflation? This too must be simultaneously addressed with any student loan forgiveness program. Universities must be publicly pressed to explain the exorbitant increase over the last half century.
Reform as well as forgiveness are equal parts of the equation.