Tuesday, April 16, 2013

If you want to stimulate the economy forgive some of this student loan debt!

Photo credit: (AP / Bloomington Herald-Times) | Indiana University senior Randall Burns holds a sign he said represents the average debt a college student has after graduating. (April 11, 2012)
Or at least the interest! Jeez! So glad to finally see someone write an article on what is just plain common sense. You can't buy a house or a car or start a business when you are saddled with five or even six figures worth of student loan debt. As my family prepares to send my little brother off to college one thing we have sworn to never let him do is to borrow one single dollar for college. It is a viscous cycle of payments that never end and the compound interest just keeps adding up. I want my brother to have a future and not become an indentured servant to Sallie Mae.

I love and support President Obama but I really can't take any discussions about fixing the economy seriously until someone addresses and fixes the student loan sharking practices. I could give a damn about a $1200 a year Pell Grant in the face of $52,000 worth of student loans that are ballooning every day.  Lets get real, the idea of spending $500 a month in payments when only $20 of it goes to principal doesn't make me want to whip out my check book in a hurry. It's like spitting on a fire.  Would we rather have a college graduate spend $1,500 a month on a mortgage or $1,500 a month in interest payments on a student loan that may never be paid off?

When it comes to financing education sometimes a mind isn't such a terrible thing to waste. 

If there are any families out there looking at taking out a bunch of student loans to fund their child's education I say "don't." One exit to poverty is another onramp to unchecked debt. :(

Go HERE to read this Newsday article on how the burden of student loans is eliminating potential homebuyers from the real estate market.


Luke Nichter of Harker Heights, Texas, said he’s not a renter by choice. The Texas A&M University history professor’s $125,000 of student debt means he has no hope of getting a mortgage. 
Nichter, 35, who’s paying $1,500 a month on loans for degrees from Bowling Green State University in Ohio, is part of the most debt-laden generation to emerge from college. Two-thirds of student loans are held by people under the age of 40, according to the Federal Reserve Bank of New York, blocking millions of them from taking advantage of the most affordable housing market on record. The number of people in that age group who own homes fell by 4.6 percent in the fourth quarter from the third, the biggest drop in records dating to 1982. 
“Student debt has a dramatic impact on the ability to buy a house, and to buy the dishwashers and the lawnmowers and all the other purchases that stem from that,” said Diane Swonk, chief economist of Mesirow Financial. “It has a ripple effect throughout the economy.”

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