When other major stories are not crowding it out, the media occasionally gets around to a story or two on student loan debt. The college graduates of the last ten years or more are drowning in student loan debts. There is a radical solution to this problem.
What is it?
Abolish the student loan program.
Liberals will immediately scream that I am anti-education. I want to see the great masses of Americans stuck with 6th grade educations, forced to work the fields and flip burgers or hit the highlight of their career by being able to say, “Welcome to Wal-Mart.”
Actually, nothing could be further from the truth. I do object to state funded colleges and universities being used to indoctrinate students in liberalism and I do object to stupid programs like gay studies. But I believe the state university and college secondary education system is one of the best things that state government does. I believe the state college secondary education system should do what it was designed to do, namely provide a reasonably affordable college education to the tax paying residents of a state.
The unwashed liberals, in the case of Occupy Wall Street, that is literally true, just want student loans forgiven. There is irony in Bill Clinton endorsing the Occupy Wall Street anarchy and their demands for complete forgiveness of student loans. He was the President who signed the law making student loans non-dischargeable in bankruptcy.
In wanting student loans forgiven, the left is focusing on the symptoms and not the cause of the problem. Student loans are the problem. The easy access to student loans distorts and destroys the free market. Students to not realize the cost of what they are getting. They don’t write the check. They just fill out the paperwork. Sometimes instead of writing a check, they get a check back. The money they receive back is then spent on, hopefully living expenses. Back in the day when I was a college student, pizza and beer were considered living expenses. Somehow I doubt that has changed.
For colleges, the student loans take the sting out of the market place. Who cares if they have to raise tuition by twenty percent? Instead of students talking about alternatives to State U., they just ask for more student loans.
The student loan program is probably one of the worst programs for encouraging bad behavior. Since the federal government guarantees loans, it is a no lose proposition for banks. They can make the loans and make a profit when people pay them back and if they fail to pay them back, the government covers the loss.
What if banks made those loans without the government guarantee? For one thing, there would be many fewer loans. That is not a bad thing, as the banks would be asking some important questions.
For example, if someone wanted to borrow $100,000 to get a nice Ivy League degree, the bank might ask, what are you going to major in and what are you going to do after college and how much will you make? If the student said, well I am going to major in social work, become a social worker and probably make about $30,000 a year, the bank is going to turn that student down. With guarantees, the bank doesn’t care whether the risk is good or not. After all, the taxpayer will pay the bank back if the loan defaults.
The state college systems have a lot of affordable options. Maybe a student wants to go to State U., but does not have the money. Every state has affordable regional junior colleges where someone can start. Students can work and help pay for their college. There are many options if we abolish this really bad program.
One of the other benefits of abolishing Guaranteed Student loans is, it will deflate the education bubble and tuition will come down. Market factors will start to play a role in the cost of education again.
The Guaranteed Student Loan program is the classic case of a well intentioned government program that has destroyed the market, cost the tax payers a lot of money and is now hurting the very people it was intended to help.
Ronald Reagan was right when he said the most feared words in the English language are, “I’m from the Government. I’m here to help.”
If you're a senior, you are Cain's favorite target. He can't wait to get his hands in our pockets. Any senior that is unfortunate enough to be on SSI only, better look for a job if Cain gets in because you will get NO DEDUCTIONS and NO EXEMPTIONS whatsoever under his 999 plan you will pay 9% tax on your SSI and will pay 9% national sales tax on top of the current state and local sales tax you now pay on EVERY single purchase you make be it groceries or a new car or house. Cain is planning a massacre alright but it's seniors and many middle income families that will bare the brunt of it. Here's a quick check to see how good 999 would work for everyone.
If you are a senior or a family look at your last tax form, now take away the dependent credits for yourself, your wife and children and the credit for your house, donations, any credits or exemptions you have and multiply your total income by9% and remember you are also paying that additional 9% national sales tax too for everything including that new car you want. Now if you are an average family and not wealthy, tell me how much $$$$ you are saving with 999??? SMOKE AND MIRRORS PEOPLE, worthy of an ovomit con. Also do some real research on the man, he is pro Federal Reserve, and he was the head of the Federal Reserve in KS, his ultimate hero in his own words at the last debate is Greenspan, there is still a large class action law suit pending with one of the companies he headed just to name a few.
"Higher education" has become much less than advertised.
Apprenticeship PLUS education would be much more practical.
What if businesses received a tax break for "educating" employees?
Employees could work part time at reduced wage and
school part time via traveling professors if necessary.
There's no reason why OJT should not have "higher education" equivalency.
And the parts not usually in OJT could easily be included at a tiny fraction of college costs.
There could be a STANDARD DEGREE system and a TEST to VERIFY
accomplishment for every phase of education.
Useless "cram" courses can be discouraged by testing for memory retention over time
and NOT granting the tax break until it's clear the person knows the stuff.
No one would be paying for hot air.
The student and employer are face to face. Quid pro quo. No banker needed.
Most big businesses already have smaller education programs in place.
America would have a much higher number of truly educated people with a work ethic.