Student loan debt is one of the biggest crises our country faces at this time. Although it might not have the urgency of a potential nuclear standoff with North Korea, it is critical to the financial well-being of our country. As the cost of a college education continues to soar, more Americans are graduating with debt. Currently, the total national student loan debt stands at $1.5 trillion and is growing.
Given the scope of this problem, many politicians are looking for answers. In some states, this has led to offering free or low-cost college for residents, particularly through the community college system. Other states have devoted more resources toward their higher education systems to make them more affordable across the board. At the federal level, a new idea has been proposed, called the Student Security Act of 2017, that could offer a way for anyone with student loans to get out of debt, but it comes with a trade-off.
What Exactly is the Student Security Act?
More than 40 million Americans have student loan debt. This debt prevents many people from buying homes, starting families, and becoming entrepreneurs. The Student Security Act of 2017 aims to help these graduates by allowing them to receive immediate relief on their student loans, but it could also help to make the Social Security Program solvent. The Social Security Administration projects this act would save $700 billion over the life of the program.
The Student Security Act is an innovative way to help college graduates get out of debt. It offers grads a choice of delaying their retirement in exchange for immediate relief on their student loan debt. By doing so, they will also choose to delay their ability to receive Social Security benefits.
For every month that a graduate chooses to delay retirement, he or she would receive $550 in student loan forgiveness, which is the equivalent of $6,600 per year. The proposed bill would cap total student debt forgiveness at $40,150. If a student chooses to reduce their student loan debt by this amount, they would be delaying the ability to access Social Security benefits for a total of six years and one month. That would push the current full retirement age from 67 years old to 73 years old.
One important factor to keep in mind is that the average life expectancy for Americans is 78.8 years old. While this might not influence a person’s decision to take advantage of student loan forgiveness through this bill, if it became law, it is something to consider as part of the overall calculation.
Will This Become Law?
Nobody can be sure if any bill will become a law, but if this one does not, it leaves students in the same position they were in before: deep in debt. If it does become law, graduates will have to weigh whether it is worth putting off retirement for a chance to have part of their student loans forgiven.