The Looming Fate of Student Loans
Do you have student loans? Most people going to college these days often have no choice but to go into debt to finance their education. This is an unfortunate situation, indeed, and many young Americans are about to start feeling the pressure this coming fall. What can we do about this situation?
The New York Times had an excellent article available yesterday that highlights the pressures and consequences of the current system. It’s long, but definitely worth a read through.
I feel the most intriguing part comes on page 6. The concept of an “Income-Contingent Repayment Plan” is an interesting one. Here’s what the Times had to say:
Friedman suggested that it would be more efficient to tax students a percentage of their future earnings rather than to have them take out fixed-rate loans for their education. His idea has taken many different iterations since then, but income-contingent repayment, as it’s now called, has never really gained a foothold in the
United States beyond a limited option available in the federal direct-lending program.
Why hasn’t this type of program taken off in the United States? My personal opinion is that Americans will call foul and deem the program unfair for some reason. It would be irrational, but I feel it would happen. What do you think of this type of program, and do you think it could ever be implemented in the United States?
J. Dakar said,
June 13, 2006 @ 6:41 pm
That sounds like a great idea!
I’m sure lots of people would really take advantage of them; particularly a few athletes at my school (who just reverted to Division III) who can’t afford to pay such an exorbitant amount for tuition now that athletic scholarships are gone.
By the way, I’m not entirely sure how I ended up here…but I’m glad I did; definitely good reading material.
Nick said,
June 13, 2006 @ 6:58 pm
J. looks like you ended up here via Chris Pearson’s blog, Pearsonified. I’m glad you happened upon my little corner of the internet.
Thanks for the insightful comment. The idea does seem pretty sweet, when you think about it. I can’t help but feel that it’ll never come to fruition without a revolutionary movement or something.
J. Dakar said,
June 13, 2006 @ 7:13 pm
Ahh, yes, now I remember. I clicked on your link on one of the comments you made on Chris’s site.
And yeah, you’re probably right, but we can dream.