Resolving the American Student Loan Plague

Trillions of dollars in student debt is the American corporate citizen. Taking student loans to go to college to get a degree to get a job.

Many folks simply can’t pay back what they owe never mind the interest on what they owe.

What’s the solution? We need to understand the problem and analogous situations however, before I lose you- the solution is simple:

(a) allow all student loans to be paid back at pennies on the dollar- bringing in billions now vs a trickle or none later;

(b) only pay what you owe- all interest cleared;

(c) going forward fixed rate loans only at 1 % with ability to restructure, go bankrupt, no compounding until employed and suspended compounding if laid off or disabled, and employers required to kick in some since they benefit from the training but they can use as tax deduction;

(d) allow others to make payments to student debt - as a tax donation for them allow those with the debt to expense it on tax deductions and income tax while paying student loans;

(e) for those that already paid it off - allow them to claim deductions until their even from the amount they paid in interest.

I think my solutions in the article below are a solid start - hope you enjoy. The situation of 1.8 trillion outstanding student debt needs resolution and I think resolution could do wonders for the:

A. the US economy (bringing in billions, motivating folks to get married start companies and have more kids);

B. worker morale, company talent; and

C. future generations desire to attend college.

Many, especially those at the end of their careers, that got full scholarships, or don't live in America - just dont understand all the variables - this article can sort that. Cheers and good luck! b

The issue:

1. Shaky foundation. Those that took the student loans were often teenagers at the time. Banks, mentors, and colleges promised them they’d make great money and have a job right out of college. Turns out schools just lied about real employment timing after graduating and salaries. Parents, proud their kids got into college were convinced that was the path for their kids- ego, fear, and pride made them push their kid to college rather than other careers. Yes, the rate would be variable but they were promised it wouldn’t likely go up. Yes the interest compounded but don’t worry - you’ll pay it off before it gets high plus the rate is so low, right? Wrong. The contracts were so brutal even lawyers couldn’t understand them. This is contract of adhesion, slamming, and usury which alone makes these loans unenforceable under US Law.

2. Reality. Jobs were impossible to find for many for months and years at salaries that didn’t work plus rent was higher than expected. Lay offs kept happening. Every day that passed the compounding continued and the rate kept jumping. Lenders and loans service providers kept playing games when people tried to pay- they’d hang up, change passwords, change who was servicing the loan, kept pushing payers to forbearance to allow compounding to continue. Further we’ve learned schools just lied about hiring stats and salaries. People took the loans off lies. Fraud. Then you have kids that were on scholarship but they had to maintain what they school was nearly impossible GPAs, and they lost the scholarship. Which should make the loans cancellable.

   I call current the situation the perfect storm: college tuition went up higher than ever - as did rent - but salaries have lowered and layoffs are now the lever for most corporations - debtors are pushed into forbearance as loans keep compounding - Covid hit - 2008 then 2020 then 2025 financial crises. Some don’t understand, they took out loans when tuition was possible, salaries were good, rent was low.

3. Precedent. The loans are often bought and sold and already paid off by pension funds and investors. So many peoples debt is paid. There has been precedent to tell investors - you made a bad bet- these contracts are unenforceable - see one above and based on fraud see two above. So then in the USA we have bankruptcy laws and consumer protection laws that should kick in:

   -if contracts are bad faith - adhesion - slamming - predatory - unconscionable - usury then don’t allow collection and cancel all loans or allow collection at Pennies on the dollar;

   -if Covid PPE loans were forgiven for 799 billion then at the very least student debtors should be able to pay principal only at pennies on the dollar;

   -if elite, corporations, and business owners can declare bankruptcy so should student lenders

   -the tax payer isn’t stuck with the bill - most debt had been bought and sold so pensions and investors stuck with bad investment - and even if stuck with the bill we have spent taxes on worse than protecting citizens from predatory loans plus we protect corps, elite , and business owners plus just allow payment of principal at Pennies on dollar

4. Counter arguments:

   (a) “I paid my student debt off” yes but that doesn’t change the loan was illegal - also let’s have you get tax deductions for all the interest you paid back.

   (b) “I didn’t go to college because I knew these loans were bad” that was smart and prudent however many didn’t go to college because they didn’t get in or they didn’t want to - not because they were prudent and that doesn’t change the US laws the prohibit these type of student loans- see point one above - from pay day loans to unlawful rates at car dealerships - further - there are bankruptcy laws that are allowed for every one but students and why are you ok with PPE loans and business loans being discharged but not student loans - let’s help our fellow citizens from student debt slavery and indentured servitude greed and banks and elites

   (c) “you took the debt, pay it” well that’s not how us law works- there are laws against the loans as they are; bankruptcy laws: and precedent that says you don’t have to - look at PPE loans and all the corporations and business owners that don’t pay their debt back - why so adamant about student debt ? Also, many would pay back what they took but compounding variable interest they’re being asked to pay back 5x what they took - it’s wrong.

5. Look at the military - there are laws to protect solders from bad deals and landlords - they deploy when they don’t expect it; as teenagers and young - they don’t understand the loans they take (trucks) and so they’re protected from wolves - same should be for students - just like you don’t know when you’ll deploy - you don’t know what your salary will be or if you’ll be laid off.

6. What if we don’t be reasonable ? People just won’t be able to pay the compounding interest - many won’t got to college anymore - those that did pay their debt will pay doctors and lawyers and engineers 20x what they should so those groups can pay their loans. People won’t buy houses or have kids. Stress and anxiety will dominate - morale at work will stink as paychecks go to banks. Our economy will continue to tank.

7. What if we allow my solutions? The economy booms, students are protected, everyone gets a fair deal, and billions come in this year.

   So in conclusion, there is a way to end this and fix it going forward. American student debt is a plague. Yet there are antidotes.

   Cheers and good luck!