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Forgiving Student Loan Debt Would Stimulate Economy

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The rich get richer, and when they get poorer...well, they get bailed out. That's how it seems lately. As Congress prepares to spend a trillion bucks (in addition to the $700 billion bailout from last fall), it makes one wonder when the working middle class will get some love. The pending American Recovery and Reinvestment Act (H.R.1) will no doubt help our economy in some form, but it's not nearly enough and it's not aimed at all demographics. If we can save the suits, why can't we save the common man, right?

Robert Applebaum, an attorney from New York, thinks so and has an idea on how to help many in his shoes -- and trust me, there are many -- while stimulating the economy at the same time. The 35 year old started up an online campaign this month to bail out those "hard-working, educated middle class" suffocating in college loan debt on Facebook. He formed the group "Cancel Student Loan Debt to Stimulate the Economy" because he believes forgiving student loan debt for those making under $150,000 annually would help boost the economy from "the bottom up."

"I struggle to pay my rent and bills and have never defaulted on my student loans," he said Feb. 4. But I also don't spend money on consumer goods anymore -- not only because I can't afford them, but because I'm afraid the situation will only get worse..."

He continued, "One-time tax rebates and meager tax cuts do nothing to stimulate the economy. A recession is as much a psychological phenomenon as anything else. Knowing I'd have an extra $500 per month in my pocket will get me spending again. Multiply that across the country and the economy will start to move again."

Applebaum has been fighting off his own loans since 1998, and owes more now than he did when he graduated. He said he decided to form a group on the social networking powerhouse because he's sick of watching people like him pay the price for choosing to go for higher education and advanced degrees.

"I was watching the news about not only the current economic stimulus package but the second bailout for the financial institutions that's coming down the pike (in addition to the $700 billion TARP bailout). News about lavish vacations, exorbitant bonuses and the redecorating of the Chairman of Merrill Lynch's office absolutely disgusted me," recalled Applebaum, who has seen his group surpass 3,000 in just a few days after he formed it.

"It occurred to me that these guys are responsible for the mess yet they have their hands out asking the taxpayers for billions of dollars [while] continuing to spend money like drunken poets on payday," he added.

Applebaum's not alone in his thought processes. Fellow Facebooker Kevin Bartoy, a 35-year-old archeologist from Old Hickory, TN started up a similar group a few weeks ago because he and his wife have been drowning in student loan debt as well. Applebaum contacted Bartoy, and the two have since banded together, running their respective groups as "sisters." The goal is to gain enough traction it'll grab President Obama's attention. The creation of this petition will surely help.

"This would truly allow the educated lower and middle classes to create a solid foundation for a new economy," Bartoy said. "It is frustrating to be a society in which you need the educational credentials to succeed, but to get them, you have to put yourself in so much debt that you lose your independence in the process."

Applebaum said it'll be hard for Washington to not take this proposal seriously if their movement continues to gain members and online "signatures." At the very least, he said, they have to consider it. "I'm sure there are plenty of Washington staffers in the same boat as me. I'm hoping this will catch the eye of some of them and pass the idea along to the powers that be," he said.

"If nothing else, it warrants a good, hard look and some analysis as to whether it could work... We have an entire class of highly educated poor people. The idea is no crazier than handing over billions if not trillions of additional dollars to the very institutions responsible for the crisis."

What do you think? Is this even possible? Please weigh in.