Forget Student Loan Cancellation, Make College 3 Years Instead
If you really want to help student loan borrowers with student loans, itâs time to consider this.
Hereâs what you need to know.
Whether you support or opposeÂ wide-scale student loan cancellation, there are some undeniable facts about higher education:
- The cost of college is expensive;
- Tuition continues to rise;
- Students will continue to borrow student loans; and
- Overall student loan debt will continue to grow.
While some states offer heavily subsidized public colleges and univerities, itâs not uncommon for some private colleges to haveÂ annual tuition of $50,000 or higher. Democrats in Congress have focused on cancelling student loan debt as a major solution, and want President Joe Biden to cancel up to $50,000 of student loans. To date, theÂ latest update on student loan cancellationÂ is that wide-scale student loan forgiveness is looking less promising.
- One-time student loan cancellation:Â However, this proposal is forÂ one-time student loan cancellationÂ and doesnât address the underlying problem of theÂ cost of college.
- Benefits existing student loan borrowers only:Â If there is any student loan cancellation, it would only benefitÂ existing student loan borrowers. The day after student loan cancellation, for example, students will keep borrowing student loans and they wonât get any student loan relief.
- Only for federal student loans:Â AnyÂ student loan cancellationÂ likely would be for federal student loans, so student loan borrowers with private student loans would still have student loan debt
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Student loan cancellation isnât the only answer
If legislators really want to address growing student loan debt, they need to consider a bipartisan solution that doesnât heavily burden taxpayers. This is not to say that Democrats in Congress havenât explored different proposals to cancel student loans. For example, Democrats proposed toÂ forgive student loans with four changes. If Congress or Biden cancels up to $50,000 of student loans, it could wipe out student loan debt for 36 million student loan borrowers. At the same time, student loan cancellation could cost taxpayers up to $1 trillion. Republicans in Congress wonât support student loan cancellation, and many moderate Democrats wonât either. There are at leastÂ 5 signs Biden wonât enact student loan cancellationÂ either. Remember this: student loans are important to address, but student loans arenât the product students are purchasing. Theyâre the mechanism to finance education. If there wasnât high tuition, student loan borrowers wouldnât have to borrow as much student loan debt. Thatâs why Democrats and Republicans in Congress instead should focus on working with colleges and universities to reimagine higher education.
Make college three years long
One potential bipartisan solutionÂ is to make college three years rather than four years. Consider it a better way to âcancel student loans.â This wonât happen through legislative actionâCongress isnât going to compel colleges and universities to enact this change. This proposal is meant for a wider discussion among the president, legislators, governors, mayors, educators, students, administrators, employers and other stakeholders. Will this solve the cost of higher education or make student loans disappear? No. However, itâs worth exploring as one potential solution, among many, that wonât directly burden taxpayers and wonât alienate peopleÂ who no longer have student loans or who didnât go to collegeÂ (which is approximately 80% of adult Americans).
The argument is simple: three years of college means three years of student loans. Student loan borrowers wouldnât be burdened with an extra year of student loan debt. They could begin working a year earlier and earn income. They could start student loan repayment a year earlier. They could start saving earlier for retirement, start a business and start a family. Itâs a softer approach thanÂ âfree collegeâÂ or âcancel all student loans,â which currently is a tougher sell in Congress.
Colleges and universities would lose one year of revenue, which for some colleges and universities may be untenable. Again, three-year college wouldnât be mandatory or legally enforced; it would be optional. Colleges and universities could offer three years of college or keep the existing four-year college program. For those colleges and universities that offer a three-year college degree, federal and state governments could consider various financial incentives. The curriculum may need to be redesigned to allow students to complete their academic requirements in a shorter timeframe without sacrificing academic rigor, but most students would likely welcome the opportunity if it meant borrowing less student loan debt.
Three year college wonât solve the cost of higher education or eliminate student loans. However, itâs a first step that should be considered as America seeks to make higher education more affordable and more accessible.
If you have student loans, make sure you know your next steps for student loan repayment. Consider these potential options, all of which have no fees:
- Student loan refinancingÂ
- Income-driven repayment plansÂ
- Public service loan forgivenessÂ