Dumb Idea: Student Loan Fairness Act

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The Student Loan Fairness Act is only “fair” if you believe that the government should be subsidizing students who go to colleges and universities they can’t afford with no real intention of ever paying back their debt. I say this as someone with considerable student loan debt and income too modest to make a real dent in it. What does the act do? A leftist petition explains:

But now, there is a solution: H.R. 1330 – The Student Loan Fairness Act – Introduced in the House of Representatives by Rep. Karen Bass (D-CA) and co-sponsored by Rep. Frederica Wilson (D-FL)!

The Student Loan Fairness Act would create a new “10-10” standard for student loan repayment, in which an individual would be required to make ten years of payments at 10% of their discretionary income, after which, their remaining student loan debt would be forgiven.

Note that it defines discretionary income, not total income, meaning a poor student post-graduation could conceivably have little or no obligation to repay. We may be talking about $100 a year for someone with only $1,000 in discretionary income a year. After 10 years, a cool grand banked, they would get their debt forgiven, even it means they fleeced their borrower out of $49,000 on a $50,000 loan. Taxpayers would be left footing the bill.

As I said, I would conceivably benefit greatly under this proposal. MoveOn.org has garnered nearly 50,000 signatures for it, but it’s bad legislation. It teaches all the wrong lessons to college graduates and college drop-outs. Are you working a job below your pay grade, but you’re too lazy to move up? Not a problem, we’ll take a tiny chunk of your income and forgive tens of thousands of dollars in debt. It’s time we stop subsidizing the higher education bubble.

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