H.R. 4170

Could there be a solution to end the Student Debt Crisis? On March 8th, 2012, Representative Hansen Clarke introduced the Student Loan Forgiveness Act or H.R. 4170. I’m very skeptical of this solution, so I figured it would be smart to do some investigating.  What is the purpose of this bill? H.R. 4170 wants to help relieve students of their student debt so that they can have greater control over their financial earnings. This could potentially cause an increase in entrepreneurship and demands for goods and services across our nation. In order to help relieve debt, there must be an amendment to the Higher Education Act of 1965. This bill wants to create the “10-10 standard.” This means that if you make payments equal to 10% of your discretionary income for 10 years, then your remaining federal debt will be forgiven. Now if you are already making payments on your student loans, then the “10-10 standard” would apply to you as well. It would just be less than 10 years and money already paid would county towards loan forgiveness.

The 10-10 standard can help ease the mentality of being in debt forever. It can help people see that in 10 years there will be a light at the end of the tunnel. To pay off your debt for 10 years at a smaller percentage can help you keep more money in your wallet and not be struggling as much. This can boost and stimulate the economy, which is needed at this time. Most of the people in the age group that stimulates the economy the most are the ones in debt.  This bill would also cap government interest rates at 3.4% and it would allow existing borrows whose student debts are more than their income to break free from private loan rates and have them change into federal direct loans. This would allow them to enter the 10/10 program and have a chance at relief. It would reward graduates that enter a public service profession. There is a cap at 45,520 on the forgiveness loan.

This bill could be a great solution to this crisis. Student debt continues to increase and no one seems to notice that it is a problem. Student debt has surpassed credit card debt and is continuing to rise. This is scary because credit card debt is meant to be the scariest debt of them all. Instead, it is being challenged by an invincible opponent. Not even bankruptcy can destroy student debt.  As debt continues to rise they aren’t being paid off quickly. Borrows stay in the negative and accrue more and more interest. This bill will be financed the money that will be saved from the Iraq and Afghanistan Overseas Contingency Operations and not affect t any other existing student aid programs. It is good to know that it won’t harm other programs that were created to aid students. Before today I never heard anything about this bill. I felt the need to do more investigating on this bill. There is currently a movement amongst students and followers about getting this bill passed. It is currently being held hostage by a committee in Congress and needs help to escape. Could this be the solution to ease our financial burdens? Let’s hope that this bill passes.


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    • helpful hints on December 3, 2012 at 4:47 am

    Very good article. I will be experiencing many of these issues
    as well..

    • http://debtstips.com on October 30, 2012 at 5:53 am

    I think,there are millions of students with student loans after they have completed a college education.
    According to the studies there is almost $1 trillion in student loan debt, which could actually pass the amount of the USA’s credit card debt. There are many who feel student loan debt is almost like the mortgage issue in 2007. This is due to the fact that student loans cannot be discharged in a bankruptcy.

  1. I love that you are doing so much research on this topic! Many of my friends from high school chose not to attend college and instead went to a vocational school. They believed that college would not be worth their while because the student debt is such a great burden once students are finished. Anything that could possibly help students with their debt should be considered, especially when our national debt is at a dramatic low. Maybe the following link could help you further in your research. http://www.cnbc.com/id/40680905

  2. Ooh! I had no idea that a bill like this was in the works. This sounds great and I’m glad you’re sharing this information with us. It’s a great idea. It’s a fantastic idea for us as students who more than likely have government debt already attached to us, but I think it’s main problem is the very fact it’s a good idea–no one’s going to want to listen if it means less profit for debtors. It’s definitely going to have a tough time getting passed, but I really hope it does. Will the entirety of it be funded by the money that’s coming back after the ending of the war in Iraq? What odds do you think the bill has of actually passing in our current political climate?

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