STUDENT LOANS
(ideas that will work far better)
You are smarter than your above-average politician. Your first rule for Congress would be ONE ITEM PER BILL, wouldn’t it??? (You and at least 50 of your nearby neighbors.) If something could not pass on its own merits…then it should not be added to something that will push it over the top. There are tons of illogical things done by those agenda-driven schmucks. The Student Loan fiasco is one of those issues which is illogical and for which YOU have a better answer. (I know that because I have read hundreds of the ideas of everyday Americans.) If those students can’t pay back their own loans, what makes our leaders think WE could afford it instead? Yup! Illogical. Not being in love with either political party, I have no axe to grind.
The first problem with paying off student loans is how BIG they are. Some students exit college (just college) with loans exceeding $150,000. That’s crazy!!! Not long ago that was what a HOUSE cost. It is also fixable.
Second, many loans are for worthless degrees.
Third, college students don’t seem to understand that the bigger the loan, the bigger the payment.
Fourth, many students think they shouldn’t have to pay off their loans.
Fifth, colleges have no incentive to keep costs down or to steer students away from worthless degrees.
Following are 11 ideas which could HELP to reduce these issues:
Fix #1: Reduce the annual available loan. You say you need $35,000? Well, maybe you should find a different school, earn a little more money, or find a rich aunt…because the top allowed loan for THIS college year is $29,000. Colleges may even find ways to reduce costs for attending, eh?
Fix #2: Treat student loans like other loans, except that the interest is deferred and payments are halved while in school. Start payments the very next month. Knowing you have to begin a re-payment program the next month, maybe you will take out a smaller loan, be a bit more careful with your budget, and NOT buy a keg for that party…and maybe you won’t spend your loan money going on a spring break trip to Cancun…etc. After a few semesters of payments, you might suddenly realize that going to a cheaper school would get you the same degree. If someone takes a total of $100,000 by their final semester in their senior year their payments would be over $200/month. That is devastating when you are trying to finish school.
However, one advantage is that schools would have to make their degree programs more financially competitive. College A might find a way to reduce annual costs by 5% for those completing their degrees. College B might come up with more help for Sophomores who are excelling in a degree program. College C might spend more time training incoming Freshmen on financial responsibility.
Additionally, many landlords take advantage of cash-rich students. If the students were not so “rich” then housing would have to cost less. In one university town landlords charge $800 for a bedroom and shared bath, no common areas, kitchen or laundry. That’s outrageous! Yet it makes sense because those students have tons of loan money they can use to pay those high prices.
Fix #3: The bigger the loan, the bigger the payments. Maybe the payments don’t seem all that big the first semester, but when you get that next loan for semester 2 suddenly your payments double. It becomes very real. When you start your Sophomore year the payments increase again, and you ask yourself whether you can afford a college education, and you purposely begin taking smaller loans. The biggest advantage of paying as you go is that the amount of remaining debt upon graduation is reduced. You’ve already paid off 5% of your 1st semester Freshman loan by the time you start your Sophomore year.
Fix #4: No additional loans for anyone behind in loan payments. This is why SOME payment should be required. (Speaks for itself).
Fix #5: I do not think the government should involve taxpayers in paying off loans WE (taxpayers) had no voice in granting. However, if our generous Federal government decides to help people with student loans (the gift of $10,000/student, for example) then it should be (1) only available if their payments are up to date. Taxpayers should not be dragged into providing help for deadbeat loans. (2) only used as a “matching” program. For example: Taxpayers match $3 for every $5 of principal the student pays in the next year, up to $10,000. This is still a great deal!
Fix #6: They are supposed to do this, but many do not… Colleges and Universities must have the SAME scale and SAME format for reporting costs of attending at THEIR website, broken down by broad category like nutrition labels on breakfast cereals. For example, Tuition and Fees, Books and Labs, Food and Housing, Other required expenses (like, Student Union fees, Parking Pass, Required Uniforms). This allows students to understand the actual cost of attending each school in a way which fairly reports costs. This gives potential students the opportunity to compare the costs of otherwise similar schools. Smart students will figure out how much they could save going to College B.
Fix #7: Every college that accepts student loan financing (some don’t) must have work opportunities for Juniors and Seniors to help them stay current on loan payments.
Fix #8: Special loans for worthless college degrees. You want to get a degree in Underwater Basket Weaving? Fine. But the taxpayers will not pay for it. You don’t get interest deferred on those loans, and you only get 80% of the loan you would have if it were a more worthwhile area of study. Colleges would have to step up, reducing the number of worthless degrees, if they wanted to make a profit.
Fix #9: College loans should be paid in full by the 20th anniversary of the initial loan approved. I know people who are still paying 35 years later. The government should have the right to put a lien on your house and/or draw from your household wages and other assets to pay it off after that point. No deadbeats allowed. 20 years is plenty…I paid off my college loans in less than 7 and I was in a high-stress job that paid less than a first-year teacher’s salary at the time.
Fix #10: Maintain a GPA above 2.75 or no loan for the next semester. Presently this is decided by EACH college or university. Some only require a 2.0, others 3.0 to be eligible for a LOAN!!! Why is the school deciding eligibility FOR A LOAN they are not funding?
Fix #11: In general, student loan money should never be used for spring break, alcohol, weed, or other non-educational or non-essential expenses.
I do not take credit for these, only for editing. They are YOUR ideas.
Copyright 2023 Donald Whelpley
[PLEASE NOTE that Don is always open to discussing the thoughts and opinions he shares here and welcomes comments as shared in the comment section. He doesn’t use other social media platforms, as I do, and won’t see whatever you’d like to share with him elsewhere. ~ Sherry]
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