The White House proposes that the government forgive billions of dollars in student debt over the next decade, a plan that cheers student advocates, but critics say it would expand a program that already encourages students to borrow too much and stick taxpayers with the bill.
The proposal, included in President Barack Obama's budget for next year, would increase the number of borrowers eligible for a program known casually as income-based repayment, which aims to help low-income workers stay current on federal student debt.
Borrowers in the program make monthly payments equivalent to 10% of their income after taxes and basic living expenses, regardless of how much they owe. After 20 years of on-time payments—10 years for those who work in public or nonprofit jobs—the balance is forgiven.
Rest at here:
Cutting Down Student Debt - WSJ.com
Another well-conceived government plan that will have absolutely *no* unintended consequences. No way this will lead to even more overborrowing.
My favorite part is the law student who borrowed $300,000 for reasons other than just school. The real fools are those who live responsibly and within their means--why not buy McMansions and borrow 6 figures to be a professional student? The writing is on the wall--politicians will eventually buy the rest of the votes from those who want free money, so why not everyone just take on as many loans as possible?