Student loan proposal has merit
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In the 11 years that I have been working on the student loan issue, not one college president has decried the fact that every standard consumer protection has been stripped uniquely from the student loans that fund their institutions.

They also have never offered up a solution to remedy the widespread financial (and other) harms that have resulted from this.

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The uniform and universal silence from the leaders of our nation's universities — particularly as the country's student loan debt has exploded to well over a trillion dollars — reflects terribly on them, the schools they run, and the academy, generally.

Last Friday this silence was, at long last, broken by Leon Botstein, president of Bard College in New York. He called for Hillary ClintonHillary Rodham ClintonAssange meets U.S. congressman, vows to prove Russia did not leak him documents High-ranking FBI official leaves Russia probe OPINION | Steve Bannon is Trump's indispensable man — don't sacrifice him to the critics MORE — who to this point has promoted a very cautious and unimpressive fix for the student loan crisis — to fight for total forgiveness of all student debt. Botstein wants her to follow this up with a new lending system that features far more robust forgiveness provisions. 

While Botstein makes no mention of the indefensible, unconscionable, and unconstitutional removal of standard consumer protections that caused this crisis, he is to be loudly applauded for piercing the veil. More importantly, the solution he proposes deserves serious consideration.

Clearly, the economic stimulus that would be created by erasing nearly $1.5 trillion in student debt would be tremendous. The borrowing capacity that would be freed up for tens of millions of voting citizens and their families would provide an immediate and dramatic increase in purchases of homes and other big-ticket items.

The sustained flow of cash that would otherwise have gone to the Department of Education in monthly installments would instead be going back into the economy for years and decades to come. On this basis alone, the proposal should be considered very seriously.

Bard assumes, however, that Donald TrumpDonald John TrumpAssange meets U.S. congressman, vows to prove Russia did not leak him documents A history lesson on the Confederacy for President Trump GOP senator: Trump hasn't 'changed much' since campaign MORE and the republicans would oppose such a proposition. I think he may be wrong.

Any republican looking closely at the current system will recognize that it has become a big-government monstrosity. It's one that has jettisoned free-market mechanisms, and one that has enabled a hyper-inflationary spiral unmatched by every other market in the U.S.— including healthcare, housing and other inflationary sectors.

Trump himself has lamented the fact that the federal government profits something like $50 billion per year on the program. Republicans in Congress have no doubt noticed the Department of Education fighting hard behind the scenes to keep free market protections away from its cash cow. There is nothing about this that any true conservative could like.

Consider further: A recent study by the Institute for Higher Education Policy found that an astonishing 63 percent of borrowers who left school in 2005 were not able to make payments on the debt 5 years later. Given that students at that time were borrowing less than half of what they are now borrowing for school, it is likely that this level of non-payment is at least as high, if not higher today.

This calls for bold, courageous action — perhaps bolder than simply returning protections like bankruptcy, statutes of limitations, and others.

Returning these protections is obviously a valid solution, but ultimately, writing off all student loan debt may be the better way to go, so that tens of millions of citizens are left hopeful and optimistic instead of financially devastated, and embittered by the stigma that accompanies a bankruptcy or other expensive, stressful workout.

While no one can tell the future on this issue, one thing is quite certain: If both Clinton and Trump don't step up courageously and continue to push non-starting, or non-existent agendas as they have to this point, the student loan bubble will burst, public confidence will dissipate, and the entire lending system will likely evaporate into a mist of illegitimacy, and much could be lost with it.

No president would want that blowing up in their faces. Both Clinton and Trump should address this now, rather than later.

Alan Collinge is Founder of StudentLoanJustice.Org, and author of The Student Loan Scam (Beacon Press)


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