Recently there was a wave of forwarded emails and Facebook copy/pasting wherein students showed their support for passing some sort of law that would forgive all student debt.
I even got it from my mom, and she stopped forwarding MoveOn.org emails to me after the 2004 election. (Then again, she moved a little more to the right in the intervening years, but I digress). My grad school classmates, my band of brothers in job searching, blew up Facebook with it.
Sounds nice, right? Drop a year's salary in debt on a Masters degree, find that it doesn't get you a job, then let the debt slide since you did the good American thing but it didn't work out for you anyway.
Too bad it can't happen.
Total student loan debt hit $830 billion this year, a 4x increase from just 10 years ago. American university education is officially a racket.
Remember AIG? The "too big to fail" guys? Their market cap was just $200 billion at peak and held just barely $1 trillion in assets. For $830 billion in debts to suddenly vanish overnight would be a serious, serious problem for the guys who own that debt.
And at 8 percent interest - that's what you're paying, grads! - the $830 billion easily balloons its valuation into the trillions of dollars. As much as I hate to say it, I suspect that forgiving student debt would actually be a systemic risk.
You could make the argument - and perhaps those on the left do - that if the government were to pay off those debts at face value, and the government has spent nearly as much money on deficit stimulus in recent years, you'd avoid financial collapse and still do the right thing.
To them, I wish them luck in persuading the government to spend nearly a trillion dollars on the country's small sliver of most educated people.
That said, as a student debtor, I'm obliged to say that I would support such an action in the alternate universe in which it could happen. But since I don't believe in online petitions or political action via Facebook posts, I'd like to propose some more concrete political action:
I will donate $10,000 to the campaign of the President who passes student loan forgiveness.
(*by way of a shell corporation, since it's above the limit for individuals.)
Sound crazy? It's more money than I have, yes. But it's a small fraction of my student debt and since I have good credit, I could pay back that loan at way less than 8 percent.