In the late 90s and early 00s, the housing market thrived. The government encouraged banks to lend money so everyone could live the American Dream and own a home. The problem? Many people could not afford homes. Whether you blame people for buying homes they couldn't afford, or the predatory lending methods used to scam people into buying homes, eventually people began to default on their mortgages en masse. The housing bubble burst. Prices plummeted, and foreclosures skyrocketed. Scammers on Wall Street manipulated this system and made obscene amounts of money selling bad loans with inflated ratings to other companies, leading to the need for bailouts and the recession. The ultimate problem here was debt. People had mortgages and credit card debt they couldn't pay for, and the system couldn't make up for it.
It is time for us to anticipate the next debt crisis and avoid it. No, it is not the debt the U.S. owes to itself (the national debt), which the government could forgive anyways and just be done with it. It is college debt. Students are faced with increasing costs for their education, and fewer job opportunities because of the recession. This is going to end in the same way as the housing bubble. Students with too much debt that they cannot pay because they cannot get jobs will default on their loans. The average student graduates with $25,250 in loan debt. There are about 19.7 million students in colleges right now. If they all graduate with the same amount of debt, that adds up to a staggering $500 billion. On top of that, current graduates hold a total of $1 trillion. With a "T." That is a HUGE problem, on the scale of the amount we paid to Wall Street crooks.
Instead of paying criminals to make obscene amounts of money, why don't we forgive student loan debt? Make it free as it is in many European countries, or require so many years of service for it, be my guest, but I think real people are much more important than big bankers, and they have much more to contribute to the country. Putting that $25,250 back in their pockets would greatly help the economy. It would encourage people to get degrees, which would put education back on the forefront, and make the U.S. an education powerhouse again. And it would prevent a debt crisis.
It's just something to think about, in my opinion.
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