The first commentator was Robert Applebaum, a guy whose Facebook group to cancel all student loan debt immediately is one of the few groups that I’m actually a member of on the social networking site. Obviously, I agreed with what Mr. Applebaum had to say in his portion of the commentary (which you can read by clicking above). The next commentator was Dr. James Monks, an associate professor of economics at the Robins School of Business at the University of Richmond.

Dr. Monks took the following stance:

A great deal has been written about the onerous debt levels taken on by some of today’s college students. Much of this discussion grossly overstates the true degree of burden that student loans place on most graduates. An overwhelming majority of students have reasonable and manageable levels of student loans. The typical four-year undergraduate student loan package totals approximately $19,000 — no more than a midsized car. An automobile begins depreciating the minute you drive it off the lot, while one’s college degree is an investment that will garner you a lifetime of higher earnings.

And Dr. Monks goes on and gives a brilliant commentary on many of the student loan debtors graduating today. Anyone who has read my blog over the years knows how important student loans and student loan debt are to me as both a real-life issue and a cause for advocacy. However, I completely agree with Dr. Monks and everything else that he wrote (which, again, you can access by clicking the link above and scrolling down the page). I did, however, feel that it was necessary to contact the good Doctor to let him know that there are people like me out there and that student loans are stifling us. So I sent Dr. Monks this e-mail:

Dr. Monks,

Thank you for your great addition to the New York Times online article regarding student loan debt. Your discussion in the online blog does a great job of dispelling the myth that the average student loan debt is too onerous for today’s college graduates. As anyone with a basic understanding of money can tell you, repaying a $20,000 student loan to earn $800,000 more over a lifetime is well worth the investment.

However, what about the outliers? What about the folks chronicled in this USA Today article:
http://www.usatoday.com/money/perfi/college/2006-06-11-debt-cover-usat_x.htm

You’ll notice my picture on that page and I might add that in addition to butchering my quotes to make me sound like I want pity, USA Today listed my total debt at $118,000 when it was really $121,000. I want no pity! I work very hard at a nonprofit financial institution where I provide money to build charter schools in New Jersey’s poorest performing districts. I operate my own small business at night and on the weekends and I’m an Adjunct Professor at the local college. I do everything that I can to generate more income so I can pay down this debt – and it’s working. Since the Summer of 2006 when I started paying back these loans, I’ve repaid $21,000 so that my total outstanding is now at $100,000. I think that’s pretty good.

I think I’m successful, student loan debt aside. However, I needed that debt in order to be the first in my family to complete college and the first to get a Masters Degree. Without those loans, I would not be where I’m at today.

But in the mean time, I’m almost 30 and I still haven’t purchased a house. My truck broke down in the fall and I had to take my mother’s old car as a replacement instead of buying a new one. Trust me, I live on an extremely frugal budget and I don’t waste a dime.

What is your advice for those of us who drive up the average student loan debt? I don’t ask as a condescending reader of the Times, I ask as someone who is impressed with your knowledge of the topic and wishes to pick your brain.

Thanks,
Joe

I changed some of the wording to protect some sensitive information. To Dr. Monks’ great credit, he responded with the following e-mail:

Joe,

I applaud your positive attitude and steadfast approach in trying to reduce your debt. I suggest that you investigate the government’s new income based repayment (IBR) program that caps repayment of federal students loans based on income. Also, you should investigate the Public Service Loan Forgiveness program that forgives federal student loans after a period of repayment for individuals working in certain public service jobs, such as non-profits. These programs may help to reduce your monthly payments and then reduce your total level of debt, for government initiated student loans. If you have private student loans, I am not aware of any similar programs. I hope this information is helpful. Good luck!

Jim

Now, I was pretty much well aware of these programs prior to e-mailing Dr. Monks, but I have to say that I was impressed with his e-mail. He clearly took the time to answer my questions and address my concerns. I think the larger student loan debate is missing this type of humanity since so many people are too quick to project their own experiences onto the lives of others.

So I take this small space on the internet to say thank you to Dr. Monks for sharing his knowledge with me…and now my readers.

Forgiving student loan debt would have an IMMEDIATE stimulating effect on the economy. Responsible people who did nothing other than pursue a higher education would have hundreds, if not thousands of extra dollars per month to spend, fueling the economy NOW. Those extra dollars being pumped into the economy would have a multiplying effect, unlike many of the provisions of the new stimulus package. As a result, tax revenues would go up, the credit markets will unfreeze and jobs will be created.

Let me be clear. This is NOT about a free ride. This is about a new approach to economic stimulus, nothing more. To those who would argue that this proposal would cause the banking system to collapse or make student loans unavailable to future borrowers, please allow me to respond.

You can go read Applebaum’s group page to see how he responds to the obvious criticism. What strikes me is that that aggregate student loan debt in America is roughly $600 billion. The government passed $700 billion in stimulus spending last October (which has been a failure) and another nearly $800 billion last month. Plus there is a spending bill currently before the Congress that would increase the number of dollars being spent on ridiculous earmark projects. By some estimates, in total we could be spending $2.3 trillion on stimulating the economy…with little of that actual money going directly to benefit the middle class.

Applebaum’s suggestion is an interesting one and given the personal nature of the suggestion, each person who supports or rejects it will have specific reasons why. Many of those who reject it will project their life experiences on the stories of those who support it (a common, aggravating problem in the student loan world). Likewise, many of those who support the proposal will have a level of debt that could likely be paid off after a few years of hard work and saving. But there were always be exceptions that drive the argument forward in some people’s minds. You can find some of those exceptions by reading the a petition currently on The Petition Site calling for Applebaum’s plan to be put into action.

I signed the petition and added a little bit of my story, which I think suggests why enacting a student loan forgiveness policy would be beneficial for me. Here is my little blurb, reprinted for your reading:

I graduated with $118,000 in student loan debt. Without taking out these loans, I would have never been able to receive the high quality education that I did. All I did was pursue the American Dream…and now I pay about $1,000 each month because of those student loans. I have a great job and I still can’t buy a home – heck, I can’t even buy a new car! I’m still making my payments and I’m still paying down my debt (down to $104,000 now). But if I could use that extra money each month to buy a home or a new car, I would do it in a heartbeat. However, on the path that I’m on now – neither purchase will be possible for at least the next ten years. Great…

I’m not sure if either purchase won’t be available for the next ten years, but repaying at the rate that I’m currently going (which is above and beyond the minimum monthly payments) will certainly put me on that timetable. Something needs to be done and though I have a few different ideas about how I plan on addressing this debt (can’t keep a good man down!), it would be so much more effective if the government stopped collecting it’s 4.75% interest rate off of the $50,000+ that I owe it in principle.

I don’t want a handout and I know that if things don’t change, then I’ll be able to payoff my student loans in due time. But during a time when Wall Street executives are getting million dollar bonuses for failing and when banks, insurance companies, and the automakers are getting money hand over fist from the government, you would hope that – at some point – someone in Washington steps back and says, “Whoa! What are we really doing here?!” If somebody would do that and champion this cause over the current bailout causes, I think it would truly stimulate the economy.