Friday, April 19, 2019

April 19, 2019, T+7, Part 4 -- This Is How I Know No One Really Cares About The "Student Loan Crisis"

We hear a lot about the "student loan crisis." There's even a "wiki" page. The Hill has come up with part of the solution but the fact that the US House -- now in Pelosi's control -- has not addressed the problem and the fact that Occasional-Cortex has not offered a bill to solve the problem -- tells me everything I need to know. It's a great political issue; a great political talking point; but, an issue that no one really wants to solve.

If one wants to eliminate all student debt, here's one way to do it.

First, drop the student loan rate to zero percent over six years, dropping it from 6% to 5% this year. From 5% to 4% the following year. From 4% to 3% the following year, until five or six years from now, student debt interest is zero percent and parents are only paying on the principal.

Then, five or six years from now, "write off" five percent of the debt. Then the next year, "write off" another five percent. The third year, another five percent. Ten years out, folks are no longer paying interest, and their loan is now 85% of what it was in 2019. If that's too slow, "write if off" at 10% each year.

New debt: interest at 0.1% above the money market rate with same "elimination" plan. Let folks rack up as much student debt as the government will allow, and then do the same thing. After five years, "write off" the interest owed, and gradually write off the principal.

I'm not saying I would recommend this or not as a solution, but the fact no bill has been proposed by any US representative tells me all I need to know. It's a great political issue but it's not going anywhere. At least not until Bernie wins and takes the US House and US Senate with him.

But that 6% on student loans is ridiculous.

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