Marco Rubio Has Introduced an Awesome (and Bipartisan!) Student Loan Bill

Slate ^ | July 17, 2014 | Jordan Weissmann

[wmap]

Here’s the good news: A bipartisan bill has been introduced into the Senate that might just solve the single most pressing problem with student debt.

[tumblindice]

“All federal loan borrowers would be enrolled in an income-based program where they paid 10 percent of their earnings each month, with a $10,000 annual exemption. Meanwhile, the government would collect the money directly from workers’ paychecks, just like tax withholding. One potentially controversial part: It would >forgive< up to $57,500 worth of loans after 20 years, but anything above that amount wouldn’t be forgiven for 30 years. (The current Pay as You Earn repayment program forgives all debts after two decades.)”

Since these are `guaranteed student loans’ (the lender is guaranteed repayment) “forgive” means if s/he doesn’t pay, then you and I pay—it falls on the taxpayers’ backs.

I paid on my GSLs for years until they were paid off. And @ 9% interest. And no tax write-off. Screw RINO Rubio and the pony he rode in on. Students are adults when they sign these contracts. Now they want to re-negotiate their agreements?

They either keep their agreement or they don’t. They can’t have it both ways.

[Vigilanteman]

A student loan is just another loan to buy something now and pay for it later - like a vehicle, a boat or a home and should be treated as such.

That's the way it ought to be, but that's not the way it is. Student Loans and Parent PLUS loans hang on extorting payments forever.

The stated reason is that while a vehicle, a boat or a home can be repossessed if the borrower misses payments, they can't repossess a college education.

While that may be so, there is nothing to prevent them from holding transcripts or even revoking degrees. An educational institution which allows some nimrod to run up a $100,000 debt majoring in puppetry (the Occupy Wall Street poster boy) ought to share some of the responsibility just as institution which makes a $50K loan on a car worth $15K would have to.

There are a lot of reasonably priced colleges and universities out there which offer quality education for reasonable tuition. One of them, Hillsdale College in Michigan, even has their own group of lenders to make the loans at rates better than what Fedzilla offers. Why do you suppose that is?

[shalom aleichem]

Yes. All correct. The main things are (a) Keep government out of process, do not guarantee loans, and (b) do not allow students to borrow too much (unless they borrow privately).

I know kids who live on these loans, do not really engage seriously in college full time but enroll in all sorts of fly by night “schools”, tech programs, on-line scams etc which are just set up to help students live off their loans and kickback some to the “school”. Racket. Much abuse. These people are terrible loans risks.

[nhwingut]

Meanwhile, the government would collect the money directly from workers’ paychecks, just like tax withholding.

LOL. What could go wrong?

[9YearLurker]

Yep—all good points.

If students don’t otherwise have resources, scholarships, creditworthiness, whatever, there are community colleges that can get them through their first two years and state schools that they can attend part-time after that. The states already subsidize higher education well enough without the feds being involved at all.

(And if the states didn’t subsidize it, the market would provide cost-effective programs.)

[wmap]

Part of this thinking it fits the politics and also gets us closer to problem solving. Has anyone been through bankruptcy?It works on main street. Has anyone ever had loans restructured or refinanced? It does work on main street. It is the idea and politics I think needs some pondering.

[GeronL]

If Slate likes it, it must be bad

[Iron Munro]

If the EPA can garnish wages for digging a well in your own back yard there is no reason why a bank or other lender should not be permitted to garnish wages to recover a student loan in default.

People who whine about having to repay student loans (like Michelle Obama has done) are just wannabe moochers - no better than people who think working taxpayers should pay for their food, housing, transportation, cell phones, condoms or sex change operations.

[GeronL]

this kind of funemployment allows them to be artists and writers and stuff... if they were literate of course... I am sure fanfiction will pay someday... or not.

lol

[Jim Noble]

might just solve the single most pressing problem with student debt

Banning it?

[Sybeck1]

They should be looking into why college costs so much.

[octex]

There are a lot of reasonably priced colleges and universities out there which offer quality education for reasonable tuition. One of them, Hillsdale College in Michigan, even has their own group of lenders to make the loans at rates better than what Fedzilla offers.
***********************************
Agree.

Stop gov. loans to private universities/colleges like Harvard, Yale and many others. Let those dip into their HUGE endowments to give loans, with interest due, to qualified students who only take a curriculum that has a well known earning potential. ...No more of the stupid gender studies, hip-hop music (prof. Marc Hill, Yale), art history and other time wasters. If students want to take such ridiculous courses of study, they can pay full tuition.

Permit gov. student loans to State/Community univs/colleges, with the same requirement that degrees must be in fields of study that have good earning potential; none of the fluff stuff. ...Restrict such loans to only such schools that have a reasonable tuition rate (place a cap on it, depending on prevailing costs of living in the area, or the schools will just keep raising tuition rates).

Students that want to get a useless degree can pay for it but wont be saddled with a loan debt that the earnings from their degrees would not permit them to repay; and, no lenders would be stuck.