Canceling All Student Debt Will Help Economy; Ameritech Financial: Don't Hold Your Breath
ROHNERT PARK, Calif., July 13, 2018 (Newswire.com) - It’s a fantasy many student loan borrowers will not allow themselves the joy of entertaining: waking up one day to find that their student loan is gone, canceled, wiped away or forgotten. The extra money freed up and the peace of mind that comes with a life free of debt represent an impossible dream to some that feels so far out of touch with reality that it can only be considered delusional. Yet, according to a report by the Levy Economics Institute of Bard College, the American economy would actually benefit if all student debt was suddenly and instantly wiped away. Ameritech Financial, a document preparation company assisting federal student loan borrowers with applications for income-driven repayment plans, wishes this dream scenario could become reality but understands that a pragmatic approach to student debt is likely the only way to see long-term positive effects.
“It’s an interesting concept,” began Ameritech Executive Vice President Tom Knickerbocker. “It just seems a little like a pipe dream. It’s a concept only right now without any potential action.” Indeed, the idea seems partly based on a moral stance defined by a concern for the increase in costs of higher education compared to past decades. Student debt has skyrocketed over the last couple generations, and the idea of canceling that debt would not exist if not for the drastic rise in the cost of college. Still, the study makes some interesting points.
According to the study, canceling the roughly $1.4 trillion in debt held by about 44 million Americans would boost the country’s Gross Domestic Product by between $86 billion and $108 billion dollars a year for 10 years. The study also found that the unemployment rate would drop 0.22 to 0.36 percentage points over 10 years while adding over a million jobs per year to the American economy. The conclusion of the study states that “student debt cancellation produces positive feedback effects that improve several macroeconomic variables, including GDP and job growth while imposing only moderate increases on the federal deficit and interest rates and no significant inflationary pressure.” The issue at hand, then, is whether student borrowers deserve to be “bailed out” by the government.
It's an interesting concept. It just seems a little like a pipe dream.
Perhaps the money could be used in other ways to stimulate the economy if that would be the main goal. If the goal is to lower the cost of college, then loans already made during specific market conditions which made them desirable at the time they were drawn would seemingly not be part of the equation. Overall, the idea seems rooted in a movement to overhaul the student loan system in order to make college more affordable so that former students are not straddled with debt for years, or even decades.
Until this idea gains traction in Congress, if it ever will, borrowers should not be holding their breath awaiting good fortune. Instead, they should consider exploring other repayment options that will allow them to stay current on their loan while making affordable monthly payments. This may be possible through enrolling in an income-driven repayment plan, or IDR, which Knickerbocker believes can potentially have a similar positive effect on a person’s life. “With an IDR,” he explained, “a person can stay current on his or her loan and not get bailed out. Such individuals can fix their own debt by taking matters into their own hands.”
About Ameritech Financial
Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of consumers with financial analysis and student loan document preparation to apply for federal student loan repayment programs offered through the Department of Education.
Each Ameritech Financial telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).
Ameritech Financial prides itself on its exceptional customer service.
To learn more about Ameritech Financial, please contact:
5789 State Farm Drive #265
Rohnert Park, CA 94928
Source: Ameritech Financial