Among the demands of the Wall Street protesters is student debt forgivenessâ€”a debt â€œjubilee.â€Â Occupy Philly has a â€œStudent Loan Jubilee Working Group,â€ and other groups are studying the issue. Commentators say debt forgiveness is impossible. Who would foot the bill? But there is one deep pocket that could pull it offâ€”the Federal Reserve. In its first quantitative easing program (QE1), the Fed removed $1.3 trillion in toxic assets from the books of Wall Street banks. For QE4, it could remove $1 trillion in toxic debt from the backs of millions of students.
The economy would only be the better for it, as was shown by the G.I. Bill, which provided virtually-free higher education for returning veterans, along with low-interest loans for housing and business. The G.I. Bill had a sevenfold return. It was one of the best investments Congress ever made.
There are arguments against a complete student debt write-off, including that it would reward private universities that are already charging too much, and it would unfairly exclude other forms of debt from relief. But the point here is that it could be done, and it (or some similar form of consumer â€œjubileeâ€) would represent a significant stimulus to the economy. Â (click link above to read more)