Over 37 million Americans have outstanding student loans, with an average student loan balance of $24,301. This is a major drain on economic activity and is an unrealistic expectation for young adults starting and within mid-career. Efforts at aiding students have fallen short. All student loan payments should be based on ability to pay, with a maximum of 5% of annual income (adjusted annually or down when needed). ALL student loans should be forgiven after 5 years of payments, hardships or unemployment. This will be a major stimulus for the economy and will encourage students to obtain degrees that are necessary in a knowledge-economy.
Additionally, all student loan payments should be tax-deductible (principle and interest) with no income cap.