Student Loan Debt

Student debt is a form of debt that is owed by an attending, formerly withdrawn, or graduated student to a lending institution, or to a financial institution. The lent amount, often referred to as a student loan or the debts may be owed to the school (or the bank) if the student has dropped classes and withdrawn from the school. Withdrawing from a school, especially if a low (or no-income student) has withdrawn with a failing grade, could deprive the student of the ability of further attendance by disqualifying the student of necessary financial aid. Student loans also differ in many countries in the strict laws regulating renegotiating and bankruptcy. Due payments may be a retroactive penalty for services rendered by the school to the individual, including room and board.

As with most other types of debt, student debt may be considered defaulted after a given period of non-response to requests by the school or the lender for information, payment or negotiation. At that point, the debt is turned over to a Student Loan Guarantor or a collection agency. (Wikipedia)

“This issue is at a crisis level in America today. Currently nearly anyone in America can obtain a government guaranteed ‘student loan’ and attend the learning institution of their choice. They may use these funds to try and achieve any type of education they wish…useful in life or not. That does not really matter as long as the debt is paid back. But the default rate for paying these debts back are alarmingly high!”

The US “Student Loan Mess”

In The Student Loan Mess: How Good Intentions Created a Trillion-Dollar Problem (2014), authors Joel and Eric Best identified four overlapping periods of crisis related to US student loans. The periods are (1) 1958-1972 with the first federal student loans and the creation of Sallie Mae, (2) Mid-1960s-1978 with high rates of default to the near impossibility of student loan discharge in bankruptcy, (3) Mid-1990s-present and “crushing debt”, and (4) 2012-the present with widespread economic damage. (Wikipedia)

“This issue must be addressed before it get much worse. The solution will not be easy and perhaps not too popular either but it MUST be addressed immediately!”

Student loan debt rose from $480.1 billion (3.5% GDP) in Q1 2006
to $1,397.3 billion (7.5% GDP) in Q3 2016.

Distribution of student loan debt in the U.S.

See also: Student loans in the United States

There are two types of loans students borrow in the US: Federal loans and Private loans. Federal loans have a fixed interest rate, usually lower than private loans’ interest, set annually by the congress. The direct subsidized loan with the maximum amount of $5,500 has an interest rate of 4.45%, while the direct plus loan with the maximum amount of $20,500 has an interest rate of 7%. As for private loans, there are more options like fixed interest rate, variable interest rate, and income based monthly plans whose interest rates vary depending on the lender, credit history and cosigners. The average interest rate for a private loan in 2017 was 9.66%. The Economist reported in June 2014 that U.S. student loan debt exceeded $1.2 trillion with over 7 million debtors in default. In 2014, there was approximately $1.3 trillion of outstanding student loan debt in the U.S. that affected 44 million borrowers who had an average outstanding loan balance of $37,172. As of 2018, outstanding student loan debt totals 1.5 trillion.

The interest rates are a major factor in the alarming debt numbers, however, the booming of prices of college is a contributing problem to this issue.

This is a serious issue for every American whether you have students at home or not. The cost to all Americans for such action is a serious one and a huge one. The call to forgive ALL student loans is everywhere by those that also support FREE COLLEGE for everyone too. Basically forgiving all student loans is FREE COLLEGE. But is free college good for America?

According to Credible’s analysis of statistics compiled by the U.S. Department of Education, as of Dec. 31, 2018: The average student loan debt is $33,654 with a total student loan debt of $1.45 trillion dollars. Then according to the Federal Reserve Bank of New York, outstanding student loan debt in the United States lies between $902 Billion and $1 Trillion with around $864 Billion in Federal guaranteed student loan debt.

The current cost for college tuition today, for the 2017-2018 school year, at a four-year private college costs an average of $34,740. Public universities charge in-state students $9,970 and out-of-state students $25,620. But according to the College Board the majority of Americans won’t pay anywhere near that price. … “Nobody pays the same price as anyone else and very few people pay full fare.”

Over all it is a lot of money for a student to attend any college in America. According to the National Center for Educational Statistics of the 1,921,000 bachelor’s degrees conferred in 2015–16, the greatest numbers of degrees were conferred in the fields of;

  1. Business -372,000
  2. Health professions and related programs- 229,000
  3. Social sciences and history- 161,000
  4. Psychology- 117,000
  5. Biological and biomedical sciences- 114,000
  6. Engineering- 107,000
  7. Visual and performing arts- 93,000
  8. Communication, journalism, and related programs- 93,000

At the master’s degree level, the greatest numbers of degrees were conferred in the fields of;

  1. Business- 187,000
  2. Education- 146,000
  3. Health professions and related programs- 110,000

At the doctor’s degree level, the greatest numbers of degrees were conferred in the fields of

  1. Health professions and related programs- 73,700
  2. Legal professions and studies- 37,000
  3. Education- 11,800
  4. Engineering- 10,200
  5. Biological and biomedical sciences- 7,900
  6. Psychology- 6,500
  7. Physical sciences and science technologies- 6,000

What is really interesting is that among recent college graduates, the underemployment rate is even higher. Around 44% of college graduates ages 22 to 27 work in jobs that do not require a college degree. According to Jaison Abel and Richard Dietz of the Federal Reserve Bank of New York the vast majority of U.S. college graduates work in jobs that aren’t strictly related to their degrees. Again a significant number of college graduates appear to be underemployed. Another study showed that in 2010, only 62 percent of U.S. college graduates had a job that required a college degree; 62 percent! The authors estimated that just 27 percent of college grads had a job that was closely related to their major. It’s not clear that this is a big labor-market problem, though — it could just mean that many jobs don’t really require a specific field of study. But does it really?

So the controversy today is that some politicians are proposing that you and I pay for this higher education for these students to relieve this huge debt! We tax payers are to pay up to 1 trillion dollars for a higher education that 73% of the graduating students NEVER USE IN LIFE! So we are to be responsible for a student’s decision to take classes and earn a college degree in a field that they either never enter, does not require a degree, or does not pay enough to pay back their student loan? Just how does that work? Kind of like buying a Ferrari sports car that you cannot afford, cannot drive 150 miles an hour on any roads, and cannot pay the debt on it…bad decision!

According again to the National Center for Educational Statistics the United States spends for public elementary and secondary schools in the United States, in 2015–16, a total of $706 billion dollars, or $13,847 per public school student enrolled in the fall (in 2017–18 dollars). Folks we are already spending a huge amount for the mandatory elementary and high school educations for American students! Elementary schools are composed of students in kindergarten and grades 1-5. … In the United States, education is compulsory for all students until ages sixteen to eighteen depending on the individual state. According to the 2010 U.S. Census, 87.1% of people over the age of 25 were high school graduates. College is NOT mandatory…it is a choice for each student and family to make and accept responsibility! A college education is NOT required for the majority of America’s jobs either.

So with a totally free education about 3.7 million students are expected to graduate from high school during the 2019–20 school year, including 3.3 million students from public schools and 0.3 million from private schools. Yet even with a totally free high school education, as of 2017, 10 percent of Americans are still without a high school diploma or GED. Now that is a great improvement over previous years where over 60% of the population receiving a free high school education did not graduate. Even when schooling is free and mandatory Americans still do not graduate!

The facts are that history and experience tells us that people value what they pay for, when people don’t pay, they just don’t value it. Free is more often than not treated with lower regard than a service or item that is paid for. Recently, the National Association of Independent Schools (NAIS) partnered with Gallup to compare the college experiences of NAIS graduates with those of graduates of other high schools. Not surprisingly, its report (NAIS-Gallup Report on NAIS Graduates) showed that NAIS graduates fared better in college and in life after college. It showed when you pay for education you can and generally do better.

Under the proposed plan of free college for all I MUST ASK the question; what about all of us that have already paid for their college education ourselves? There are hundreds of thousands of us that already paid for our college education? Do we get a check too? Also if we taxpayers pay the student loan debt doesn’t that amount to “free college”? I am proud to say that I was the first in my entire family history to attend and graduate from college. We paid from our pocket for all of the expenses and we do not have any student debt! I went to college with former members of the military that were receiving college tuition and cost benefits too. Yes the government, using our tax dollars, pay for a college education for current and former members of our U.S. Military too.

I must ask; if a student choses a college degree path that will not land a job that pays enough to pay back the thousands of dollars in their student loan, is that the American taxpayer’s problem? I personally know students that took the “easy path” in college to get their degree. In my day it was the students that were taking the frivolous classes like “under water basket weaving” that we saw in our college. In my first administrative job I worked for a man, who was General Manager. that had a degree in English. He had ZERO business or administrative training, schooling, or experience in administration. He did not last long yet he got the job because of having a college degree.

The Montgomery GI Bill is designed to help members of the military pay for their college education. Depending on how long they are enlisted with the Army, for example, and the job they choose, they can get over $50,000 to help pay for college. All they have to do is give $100 a month during your first year of service. That is just $1,200 bucks to then get up to $50,000 back to use toward their college education. The Post-9/11 GI Bill provides money for college tuition, fees, housing, and books and supplies. Vets who attend in-state public colleges can receive up to the total cost of tuition and fees. Those attending private schools or out-of-state public colleges can receive up to a national maximum amount.

So you want free college… join the military and serve your country! You want free college then be the best at what you enjoy and get a scholarship. According to author Mark Kantrowitz, who is publisher of FastWeb and FinAid, about 20,000 students a year receive a completely free ride to college. Among full-time college students enrolled at four-year colleges, just .3% received enough grants and scholarships to cover the full cost of college. A GPA scholarship, for example, covers full tuition. Eligible students will need to have SAT scores of at least 1480 or ACT scores of at least 33, a 3.5 GPA or higher, and a rigorous academic course load. Otherwise dig into your pockets and pay for it yourselves!

Our great President Donald Trump was born and raised in the New York City borough of Queens, and received his B.S. degree in economics from the Wharton School at the University of Pennsylvania. Like me, he and his family paid for his education. President Trump has put his higher education to work for America after successfully using it in his work for decades.

I believe that every American, young or old, deserves as high of an education as they want but I question if it should be free to everyone? There are those better suited for vocational training rather than higher education. BUT the government should NEVER make that decision. That is a decision that each and every Americans must to make…period!

I strongly believe that 100% preference must be given to American citizens FIRST over any other applicants! I do not want to lower standards by any means but Americans MUST be given the first chance in our educational system in ANY educational institution that receives federal funding even at the lowest amount! Americans MUST come FIRST!


MY INTENTIONS TO ADDRESS THIS SPECIFIC ISSUE- Currently I do not support totally student loan debt forgiveness. I do not believe it has been totally and completely researched nor has the total financial impact to all Americans been explained. What I do strongly believe is that our student loan system must address the following;

  1. WE MUST LOWER interest rates to an affordable amount. Students and their parents and supporters are being held hostage to the terrible unfair high interest rates today and that MUST stop NOW!
  2. I believe strongly that students and their supporters must select a college career path that will lead them to jobs that will provide an income that will help them pay their student loan back. They must learn to make business decisions about their life early.
  3. I would like to see a required bi-annual review of each student’s progress toward graduation who has a student loan done by the educational facility. That the status of the student loan continuing is pending on that progress. (I know that this is done by some educational facilities now).
  4. I would like to see an interest rate reduction or even some debt forgiveness for students that meet or exceed their academic goals and actually graduate in the field they sought.
  5. Develop a good solid affordable college/higher/vocational education saving program that is totally tax free for each intended student in each household.

I will work with each and every legal resident of the great 2nd District of Arizona a resolve (if possible) any student debt issues they may have on a one on one basis if necessary.