Posted on 06/03/2019 4:50:58 AM PDT by Kaslin
Student loan debt is getting out of control. More than 1 million people default on their student loans every year. That is 22 percent of borrowers. And the numbers are rising; 40 percent will default on their student loans by 2023. For borrowers under age 30, their average monthly payment is almost $400. Student loan debt now exceeds $1.5 trillion — surpassing both auto loan and credit card debt. It is an epidemic that will continue to get worse unless something is done.
Making tuition “free,” as some Democrats recommend, isn’t the solution, since that just passes the debt along to other Americans as taxes are raised to pay for it. It also doesn’t work. In Sweden, where tuition is free, 70 percent of students borrow money for things like room and board. This is the same rate as students that take out student loans in the U.S.!
It would be nice to get the government out of the business of student loans completely, but since that will probably never happen, here are some realistic solutions that may help.
There are two parts to this dilemma. First, the laws must be changed to stop this from continuing. Second, address existing borrowers who cannot repay their loans.
Stop the emphasis that everyone must go to college. The percentage of high school graduates going on to college has increased to 67 percent. But many people are perfectly happy with trade schools. Student loans for trade school are far cheaper than for college. Encourage people to join the military, which can help pay for school. Students need to start considering doing their first two years of college at a community college, then transferring to a public university. Some degrees, such as nursing, can be completed at a community college in two years. Urge students to work while going to college, even if it means taking longer to complete a degree. High school guidance counselors can be of great assistance in this area.
Start teaching money management as a required class in high school or college. Students today are so coddled by their parents they expect to have nice things while in college instead of putting the money toward educational expenses.
States should offer loans that are invested. One of my law school loans was from the state of Massachusetts. After I’d made payments on it for several years, I was informed that I no longer owed the $6,000 remaining on the loan because the bonds that had been invested in had performed so well.
Student loans aren’t dischargeable in bankruptcy unless a borrower can prove “undue hardship.” Few borrowers qualify under this high standard. This is unfair considering other type of debt is dischargeable, such as credit card debt and most tax debt. If student loan debt becomes dischargeable, lenders will be more cautious about who they make loans to. They won’t give loans to people with bad credit history or who plan on majoring in fields that don’t pay enough to repay the loans. It will also stop colleges from constantly increasing tuition, since lenders will no longer approve as much in student loans. The price of college is increasing almost eight times as fast as wages. The average cost of attending a public university is now over $20,000, and at least double that at private colleges. Each department in college has an incentive to use all of their budget or otherwise another department will take it and they will get less money the next year.
Student loans aren’t dischargeable in bankruptcy unless a borrower can prove “undue hardship.” Few borrowers qualify under this high standard. This is unfair considering other type of debt is dischargeable, such as credit card debt and most tax debt. If student loan debt becomes dischargeable, lenders will be more cautious about who they make loans to. They won’t give loans to people with bad credit history or who plan on majoring in fields that don’t pay enough to repay the loans. It will also stop colleges from constantly increasing tuition, since lenders will no longer approve as much in student loans. The price of college is increasing almost eight times as fast as wages. The average cost of attending a public university is now over $20,000, and at least double that at private colleges. Each department in college has an incentive to use all of their budget or otherwise another department will take it and they will get less money the next year.
Allow more generous repayment plans. Right now, the income-based payment plans, even for people who work at nonprofits, are impossible for people struggling with other types of debt. Allow borrowers to pay back a lower amount each month, taking into consideration their other debt obligations. There is no student debt crisis in Sweden because payments are spread out over 25 years. In the U.S., payment plans are 10 years. This is even though Swedish students take out about the same amount in students on average as U.S. students.
It’s now hurting older people. Those above age 60 owe an average of $33,800 in student loan debt. The government is known to garnish their Social Security benefits to pay it off. It also hurts women disproportionately. They hold two-thirds of student debt, but make 20 percent less than men.
While it would be nice to leave the student loan business up to the free market, eliminating the federal government’s role in providing loans, good luck getting Congress to stop meddling. These options are at least far better than “free” tuition.
Do nothing! Have the students pay their debt just like everyday Americans who pay their debt! Very simple!
Politicians just looking for votes!
Begin with the Ivy League, since they're now all Commie anyway.
And use their endowments to pay off ALL student debt.
Begin with Big 10 and similar state flagship and State Universities' STEM grads.
Womyn's Greivance and similar majors are not eligible.
"From each according to his means..." and all that.
My answer for the future would be to have national maximum tuition cap. Any tuition costs above that cap must be financed by the institution and that portion of the debt will can be discharged by bankruptcy.
Let’s collect the facts.
Academic institutions are the breeding ground for liberal Demon-Rats.
Majority of student debt is to liberal Rats.
Bailing out the liberal Rats will only facilitating the breeding of more Rats.
Solution:
Hold universities liable by having them guarantee student loans.
Stop free funding universities which has created runaway tuition inflation.
Get a job...work your way through college.
Next question, please.
The only reason tuition rates are going up so quickly is because there is money available through easy loans to students. Curtail the money supply and tuitions will decrease. If the schools have to actually compete for students then the price will go down and the quality will go up.
What crisis? Do student loans have cancer? Are they drowning?
Students loans are need to subsidize all the liberals employed by colleges and universities.
Agreed. It would be interesting to look at the differences in lifestyle (ie. net income), job satisfaction, "settling down" vs job-hopping (and associated relocation), stress, retirement...etc. between someone who goes to a 4 year college, takes 5 years to complete it (as now seems fairly common) vs someone who spends a few months in a trade school, comes out, apprentices or some such, then goes on to be a master at their craft.
Personally, yes, I have 3 degrees in science and engineering. I love what I do, I've been doing it for over 3 decades, and by all accounts (successes, job ratings, position advancement) I'm far better than average at it. But when it comes time for professional level maintenance or repair on my vehicles, home, major appliances, etc. I don't need someone with a Phd in 17th Century French Literature. I need someone with a specific skill set, tools, and training. I can get that Phd to serve me my fries...
I completely understand your reasoning, however, the government has helped create this mess with all of its mandates and guaranteeing of loans. We need to fix the government portion. This is an economic time bomb of our own making.
Completely agree. Politicians took over the “student loan” program knowing rhis would happen and that it would give them a powerful economic issue. Like “Healthcare,” it’s another created issue that the federal government should stay out of.
But how about treating them the same? Most universities are cesspools of Marxism and have no redeeming value to a free society. They are a much better candidate for government takeover than my doctor and probably yours.
Think of all university professors being handed government approved, useless course guide to teach from instead of their own useless scripts? Think of them being paid on federal GS employee scale, with no outside income allowed unless approved in advance. Etc, etc.
I don’t like the idea of how much it would cost, but I do like the idea of Marxist professors being made to live under Marxism. Single payer? No, single teacher!
The cost of college will stop increasing when people get smart and stop paying for something that will end up being one of the worst decisions they can ever make.
Make the school responsible for the loan if the student defaults. It would put a lot more scrutiny on the types of degrees offered and also on the academic performance of the student.
> My answer for the future would be to have national maximum tuition cap. Any tuition costs above that cap must be financed by the institution and that portion of the debt will can be discharged by bankruptcy. <
That’s a great idea. Among other things, it would force colleges to act more responsibly.
Now:
Student: “I want to major in 12th century French poetry.”
College: “Sounds good! You’re enrolled. Now go borrow $100,000 for tuition.”
Under your plan:
Student: “I want to major in 12th century French poetry.”
College: “Ah...no. There’s no market for that. Pick something else.”
My feeling is that a ‘student loan’ is actually a business investment. The first thing that should change is that a ‘business investment’ repayment, and the interest, is TAX DEDUCTABLE. Further, prior individuals whom have paid back FEDERAL student loans (not private) should be able to RETROACTIVELY deduct the debt from their future taxes.
No, this doesn’t fix the ‘XXXXX(fill in the blank) Studies’ majors whom have useless degrees. However, it gives the people that had to take out loans to invest in themselves a chance at paying them back. Further, it helps the economy because it’s a Tax break on the working class.
Dear Rachel,
No. Here’s the plan:
L
We have to give relief or go socialist which was their goal. This was cloward-piven tactics and they worked. We can’t pretend this didn’t happen.
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