The crypto-token addresses students' need to lessen their debt burden by multiple mechanisms:
The token will allow students to decrease the interest rate on their loan amount thereby reducing the cost of servicing the debt. This is effectively analogous to buying points to reduce mortgage rates, with the exception that points can be bought anytime within the term of the loan; the reduction in interest rate applies to the remaining loan term.
The air-dropped tokens (equivalent to 0.01% of the loan amount per year for the term of the loan) assure students of decreasing the amount of interest rate dollars they have to pay back by 38% - even if they do nothing with the tokens but exchange them for decreases in interest rates. Because the tokens are air-dropped every year, they also act as a hedge against cryptocurrency appreciation being able to buy lesser reductions in interest rates.
The present buyers of the token are effectively 'locking in' the interest rate at today's prices and/or giving their children an opportunity to fund part of their own education so that they - in their turn - borrow less. Hence, present buyers of debt fund the education of students currently in college.
Supply and demand adjusts the price of the cryptotoken. A greater demand increases the price and is beneficial to currently enrolled students because they can convert their tokens into cash and pay off substantial amount of outstanding student loans, or can self- fund part of their education so that they need borrow less money.
Since the government holds 10% of all issued cryptotokens, it effectively makes money when the price of the token goes up. This is in stark contrast to all the suggested plans so far - where the government loses money, adds more debt and decreases the buying power of the dollar for future generations.
Existing debt need not be forgiven since future debt - starting immediatly will be passed on to people higher - up in the tax bracket.
Shireesh Apte May 09, 2022