Student Debt Can Be Fixed

One of the biggest issues that many Millennials are dealing with is their student debt…..which in most cases these days is massive. Many are looking to the candidates for an answer to their misery.

I am happy to say that all my years in college was paid for by my G.I. Bill and some scholarships….but nowadays students are not so lucky….most of them are saddled with massive debt thanx to getting an education.

Congress needs to grab their nuts and do something about this problem…..and they can if they would just grow a pair……

Students borrowed approximately $91 billion in federal loans in 2018, bringing the total outstanding loan balance to nearly $1.5 trillion.1 For many, college would not have been possible without such readily available financing, but the burden of debt has become too much. More than 1 million borrowers default every year,2 and millions more are stuck in what feels like an endless cycle of interest payments3 and benefits applications.4 Borrowers of color, in particular, are struggling to repay their debt, exacerbating long-term inequities and causing higher education to be more of a gamble than was promised.5

All of these woes are part of the college affordability crisis, but they are also part of a more arcane problem: The United States’ federal student loan repayment system is broken. This year, however, Congress has a chance to fix it.

The stars seem to have aligned for a long-overdue reauthorization of the Higher Education Act (HEA),6 the country’s primary legislation governing postsecondary education. Senate Education Committee Chairman Lamar Alexander (R-TN), who plans to retire at the end of the current congressional session, will likely be motivated to burnish his legacy by passing the first HEA reauthorization in more than a decade.7

Since HEA was last updated in 2008, the loan system has moved to 100 percent direct lending through the federal government.8 This completely federalized system has resulted in many benefits: less on-the-ground industry influence in lending;9 repayment programs that are unavailable in the private market;10 and, though it may seem ironic given the current dissatisfaction with the repayment system, stronger consumer protections.11 Perhaps most importantly, the transition to direct lending saves the federal government roughly $6 billion per year—funds that have resulted in an infusion of $36 billion of mandatory funding into the Pell Grant program over the past 10 years.12

Nevertheless, now that direct lending has been the primary federal loan system for nearly a decade, it is time for a major revamp to address modern problems.

The idea of a free college education is a great idea but will not fly……however the system of debts needs reforming if not changing…


9 thoughts on “Student Debt Can Be Fixed

  1. Perhaps they should just write it all off, and start again with a new idea? Much cheaper than a ‘Space Force’ that nobody needs.
    Best wishes, Pete.

  2. Back when my own three were in school back in the 80’s-early 90’s I managed to get involved with our local school district as a local business person/parent on some government initiative called the Education-to-Careers Partnership. At first at our local level it was an exploratory committee on meeting directly with the business community to get direct feedback on what they wanted/expected from new graduates to conform to their wishes for their workforce. It was a large inquiry into whether it was actually “necessary” for graduating high schoolers to a) go to a four year college, or b) go to a community college for two years to learn what essentially amounts to a trade in some field. That’s still being debated to this day. The greatest problem in that debate is one of parental expectation. ALL parents, for the most part, want their kids to go to college because that’s allegedly the road to some high paying career and economic success. It’s one reason it’s coming out in the media all these rich parents paying for their kids to go to ivy league schools. The total reality is that not all kids have a desire, motivation, or academic ability to care to go to college. When mommy and daddy are footing the bill many students wash out of college before they graduate.. typically after the first year.

    Now.. one might think that prior testing could determine a student’s ability to have a reasonable chance to succeed in college. But what parent wants to be told by test results that essentially… “I’m sorry, Mr. & Mrs. Jones, your kid is a dumb ass either because of some naturally inability or you failed to parent him properly, and wouldn’t survive college.” For our committee initiative back in the day there was an attempt to utilize community colleges more.. but many times this meant trying to get potential employers to adjust their employment requirements down from “must be a college grad” to “some college”. It’s natural for employers to want college grads, although many time their jobs don’t require it. It’s a big problem in mindset all around.

    I am not really for government paying for college. Like you, I did it on my own on G.I. Bill and grant money and loan money. I never went to any ivy league school so it was all a bit more affordable to me. I wasn’t hung up like most that one has to go to Harvard or Yale to achieve some measure of economic success. But there is a LOT of expectation on the part of college students to presume upon their graduation they will jump right into high paying jobs that will pay off their student debt. Again.. mindset perceptions.

    I might suggest the Fed pay for the first year of college as a bit of a head start jump for each student. Maybe if the student drops out before completing the first year he has to pay back Uncle Sam. Without a doubt, like you and I had to do, students do not deserve a free ride on their advanced education and should have their own financial skin in the game. Interestingly for all my encouragement for college on my own three offspring… two got two years completed and stopped, and my oldest, the more cerebral one, got a degree in physics and astronomy and is in the running to be one of a couple directors at the Adler Planetarium in Chicago. But the important part is that all three are doing well in their own right with whatever education they ended up with.

    1. I would favor a free two years and then a discounted if they go in state to a state university…..I went to several colleges…..U of Maryland, U of Calif, U of Washington and Calif. State–Sacramento and then grad U of Canterbury and U of Exeter…..I was lucky no debt after graduation…..chuq

      1. Well, you may have a point perhaps with the free two years thing. Just long enough for the non-four year people to get some sort of trade or fill those employment requirements of “some college preferred”.

  3. My plan is to cap student loans so that they only pay for state university tuition.Borrowing money to go to a private school and running up one or two or more hundred thousand in debt should not be the subject of government involvement.

    College costs tend to go up as the amount of government student loans increase.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.