I didn’t vote to be in the student loan business. I consider it bad business for a multitude of reasons. But, like it or not, tax dollars and government debt back student loans. First, some data:
General student loan debt facts
First, let’s start with a general picture of the student loan debt landscape. The most recent reports indicate there is:
- $1.41 trillion in total U.S. student loan debt
- 44.2 million Americans with student loan debt
- Student loan delinquency rate of 11.2% (90+ days delinquent or in default)
- Average monthly student loan payment (for borrower aged 20 to 30 years): $351
- Median monthly student loan payment (for borrower aged 20 to 30 years): $203
(Data via federalreserve.gov, newyorkfed.org here, here and here and clevelandfed.org here
Now, why stop this business:
1. It’s bad business. Loans aren’t being paid. Kids graduate and are saddled by massive debt impacting their lives for years.
2. College professors and administrators hate my president. Why finance that? See Berkeley riots.
3. College administrators are greater money wasters than government agencies. Student loans allow that to continue. Free money means useless spending covered by student loans. Educators become administrators and that’s like a community organizer for president. They are ill-equipped to run anything even a lemonade stand.
4. There are too many colleges and too many kids trying to go to college. Stop student loans and 25% of colleges will close, tuition will drop and we will have more tradesmen and women. Won’t need illegals to mow the grass.
5. Tuition will drop 50% or more as competition kicks in. Colleges will stop educating Asians who pay full boat and start admitting qualified US citizens who can afford lower tuition. Since loans will be private, banks will only loan to kids who have a likelihood of graduating.
5. This is the housing bubble all over again. Without our government backing mortgages and pushing minority loans there would not have been a housing bubble. Get out of the student loan business before this becomes 43 trillion and tuition is $100K a year.
There you have it. I voted for Trump because he is hated by educators who are teaching kids socialism. They can teach it if they choose but there will be far fewer doing it if we stop paying them for this service. And, those who retain jobs will be paid less and won’t be retiring with $300K a year in pensions starting at age 50. The elite colleges can start digging into those trillion-dollar investment funds they don’t use. Parents who saved for their kids college won’t be gouged for tuition by inflated prices funded by me, the taxpayer.
