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Forgive and Forget

Thursday, Feb. 21, 2013

The best student comment on "Forgive and Forget" wins a $100 Amazon gift certificate. Entries must be received by midnight, Sunday, March 10, 2013. Subscribe to the blog (by RSS or by e-mail in the right hand column) for updates. 
**DISCLAIMER: All characters and scenarios in this post are fictional.**
Consider these two students’ financial paths through college, and consider what the “Fairness for Struggling Students Act” (FSSA) would do for both of them. The act, now before Congress, would allow people with college loans from private lenders to get out from under those loans in bankruptcy. Currently, college loans are not dischargeable even if the borrower declares bankruptcy.
Katrina’s parents worked hard all their lives, and although they were very well off, they always  encouraged her to earn her privileges through hard work and dedication. She has never gotten a  handout or “freebie” from her parents—she started working when she was sixteen, bought her own car,
and worked hard at everything she put her mind to. When it came time for Katrina to go to college, her
parents told her that they wanted to pay for her four years in full. Since they had the financial ability to, they wanted to give their daughter the peace of mind that comes with graduating with zero debt. Katrina realized that this is an enormous gift that required sacrifice, and she was incredibly grateful.
Emily was also raised with the value of maintaining a strong work ethic. Unlike Katrina, however, she  wasn’t raised in a home that had the financial capacity to pay her tuition at an expensive private college,  largely due to the fact that she had three younger siblings. They were willing to send her to junior  college, but they could not afford more. Despite her parents’ inability to pay for her first-choice school,  she was determined to find a way to make it work at any cost. She applied to many grants, but she didn’t qualify for any federal or private need-based scholarships because her parents’ joint income was  just barely above the required threshold. After much difficulty, Emily decided to take on $150,000 in  debt to a private lender in order to go to the school of her dreams.
Both girls graduated school with honors. Katrina was overcome with gratitude for her parents’ gift of a college degree, and decided to further her education with graduate school. As Emily crossed the podium, she looked forward to starting work at a non-profit agency.
Five years later, Katrina had successfully attained a Master’s degree and was settled into a career. Emily,
however, had been unable to keep up on her loan payments, and found herself deep in debt. Facing no
other alternative, she filed for bankruptcy.
If the Fairness for Struggling Students Act were to pass, Emily’s college loans would be forgiven when
she declared bankruptcy. Is this fair to taxpayers and families like Katrina’s? Did Emily essentially make a
poor investment choice by taking out so many loans, in effect robbing taxpayers of thousands of dollars?
Are Katrina’s parents essentially being punished for being successful? Alternatively, Emily did everything
“right,” except for opting for a cheaper education. Is this act the only way that an honest, hardworking student like Emily can find justice in an extremely flawed system?
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Comments Comments

Todd Anthony said on Mar 2, 2013
Forgive and Forget. Just as in a game of poker, every one of us gets dealt a different hand. One person gets a 5, 10, Jack, Queen and King. The right choice is to ditch the 5 in the hope that you get back an Ace. However, there is only one hand out of many that will result in a win with that hand. Katrina may have been handed her education and be doing fine now, but what about 10 years from now? In 10 years, Emily could be doing much better and contributing even more than she gave up in the bankruptcy. Who are we to judge what she has done or will do? In order to pick someone up who has fallen to the ground, we must expend some of our energy. Is the person who fell wrong for costing the helper energy? I don?t think so. In the same manner, I believe we should all pitch in to help those who are having a hard time helping themselves. - Like
Mikaila Read said on Mar 3, 2013
It's an unfortunate reality that many students find themselves in: namely, that their parents make enough money to leave them essentially ineligible for federal aid, but not enough to substantially contribute to the costs of their higher education (or that they simply choose not to contribute). Forgiving college loans however, does not treat the root of the problem students like Emily face. And crass as it may sound, not every student finding themselves in an overwhelming amount of debt at the end of their education are not necessarily like Emily-- honest and hardworking. Although education has largely been described as an investment in one's future, it would seem with the rates of unemployment and the varying amount of time job placement takes following graduation, the investment is not paying off for students today. And although I can't say whether or not the Fairness for Struggling Students Act is necessarily fair or not, I cannot help but point out the hard fact that taxpayers already allow their funds to be spent on costs they do not play a direct part in determining. Finding justice for students suffering our extremely flawed system will require a radical restructuring of not only the system itself but society's attitude towards education. While I adopt the stance that everyone deserves the opportunity to learn and pursue a college degree, I do not believe that opportunity is unearned. College is a privilege and for many students, their first real exercise in adulthood-- complete with the requirement of financial responsibility. I fear loan forgiveness will encourage students to enter debt and fuel greater fiscal irresponsibility. However, I find the burden of paying for college (personally) unfair to a large degree in itself. Loan forgiveness is a hot topic of discussion, but the system of distributing federal financial aid should take precedence to loan forgiveness if we truly want to treat the problem causing an astronomical amount of student debt. - Like - 1 person likes this.
jmatta said on Mar 4, 2013
We have a story here, about Emily, that very well may represent a bulk of loan recipients. But it certainly doesn't represent all of them. Just as some lenders misled home buyers taking out mortgages (inadequately explaining rate increases, encouraging them to buy well above their means, etc.), so are some high schoolers about paying for college. I remember an NPR story about a girl who was meeting with the financial department at her college. The agent asked her about her Stafford loans, and eventually the student recalled: "Oh, you mean the Stafford grants!" Tens of thousands of dollars which she had been led by her high school guidance counselor to be "free money" was suddenly an insurmountable bill guaranteed to hold her deep in debt for many years. Do most students have counselors or advisers so foolish as to lead them down such an extremely flawed path, of course not, but consider the kind of people most likely to need financial aid. Perhaps some of them are first generation college students or are otherwise vulnerable to being unable to fully navigate the confusing web of paying for college, between grants and loans, work study and scholarships, federal and private, subsidized and unsubsidized... We should not assume every Emily willfully walked into a situation fully understanding and disregarding the consequences. But even for those who did, what kind of message are we trying to send by telling graduates that their eighteen year old self's decision to take out a quarter million was absolutely unforgivable now that they took a job that doesn't pay as well as one that their major groomed them for? Does that message mesh well with the one with which we barraged them in high school, that college was the path to success? (And, for some people, perhaps as well that they should worry about paying later, or not at all!) We know higher education virtually guarantees a higher income, which goes hand in hand with a higher quality of life and greater happiness. In a country where 1% of citizens control 40% of the country's wealth, we certainly need to do whatever we can to encourage this path forward. The policies of tomorrow should render this debate moot. Federal financing of higher education--of course not at a level of $200,000/student, but at the reasonable prices our parents paid--sounds like a reasonable option to me (though I have more research to do). I could imagine it sharpening our edge in the world quite nicely. Thank you for reading! -JM - Like
The Big Q said on Mar 12, 2013
Congratulations to "jmatta," winner of this Big Q Contest! Thank you to all who submitted thoughtful responses, and please keep commenting on our bi-weekly contests for another chance to win! "jmatta," we do need your e-mail address in order to send you your prize. Please comment here by Friday, 3/15, and include your e-mail address this time (will not be visible to anyone but site administrators) so that we can connect! - Like - 1 person likes this.
KFuelling said on Mar 14, 2013
This can be a difficult situation because this can represent a large number of students in the secondary-education system. What we have to realize is that everyone encounters different obstacles in his or her lives. While Emily desired the ability to attend her first-choice college, there may have been other ways to still earn a first-rate education while avoiding so many loans and accumulating so much debt. It is true that higher education enables higher income, but this does not mean that the most expensive education will provide a much higher income. At the moment, taxpayers are being forced to cover a number of the government?s mistakes, so it would be difficult to ask them give up even more. However, it would be nice to know that our society still believes in the idea of ?give a penny, leave a penny? and that if we support one another out, later on someone may be there when we need assistance. - Like
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Tags: debt, Forgiveness for Struggling Students Act, FSSA, loan