The REAL News About How We Should SOLVE the Student Debt Crisis in the U.S. - Policy & Procedure
Saturday, October 7th, 2023 - Amber Nestor - Firm Owner & Principal Broker
Image Above: Stock Photo
I am a REALTOR®, so you might be wondering WHY I have something to say about the Student Debt crisis in the United States.
Well, that's an easy answer: it impacts the percentage of people ABLE to obtain financing, and ABLE to pay cash to purchase a home.
There are a lot of reasons why student debt has become a crisis, and really NO ONE in our Political system is discussing the CORRECT steps that need to be taken to solve it. So, I am going to solve it for them, and for you.
These ideas are good, and they are right. So if you read this, share this with your policy makers, and see if they make something right happen.
First, let's talk money and deals for seconds. The students in the U.S. have been getting a VERY bad deal for a VERY long time. And, collectively, we all need to put pressure on our law makers, and our politicians to cut a better deal.
As a professional real estate agent, it's my job to understand the complexities of economics, markets, finance, deal making, and negotiations. I think the deal I am about to present would solve the student debt crisis permanently, while also allowing the high education lending to continue to thrive, as well as the higher education systems themselves. It would DEFINITELY improve and stimulate the economy, AND it would absolutely increase the number of highly educated individuals our society has over all, and that is ALWAYS a good and valuable asset.
It's a win, win, win for everyone.
In the words of Donald Trump, "Deals are my art form. Other people paint beautifully on canvas or write wonderful poetry. I like making deals, preferably big deals." Regardless of you opinions on Donald Trump the man, he, as a business man built a great deal of wealth. And, you have to have a mind for business to do that. Period. If you want to get a good deal on anything in life, you have to think like a deal maker. However, I digress.
The point is: think like a master negotiator. Everyone needs to get something out of this deal.
Everything in life is a deal, a negotiation, to some degree. But, when you are a young, inexperienced person, possibly one of the first in your family to pursue higher education, under the gun to get in, to get accepted, to fill out your paperwork, to make a ton of high pressure decisions that are going to impact you for the rest of your life in a pressure cooker of a time crunch, and have NO ONE to give you good, unbiased advice, the only thing you can turn out to be is SCAMMED and very taken advantage of!
This is the part where I want to curse, but I won't.
Okay, so I am going to break down all of the ways the student lending system FAILS, and immediately present the solution to each and every policy and procedure change that needs to happen.
There is only one group of people who are not going to like the ideas that I am about to present, and those are the people who have been enjoying possibly an obscene and unbridled amount of growing compound interest off of the backs of the some of the BEST and BRIGHTEST minds out country has to offer:
Young people who woke up and said, "I want to better myself!" And those young people set out to educate themselves.
What contributes to the student debt crisis, and how to we solve each contributing factor?
Here we go. Let's solve the student debt crisis in 10 easy steps, maybe 11!
Problem: 17 and 18 year old youths setting out to begin a college education are often coming from families that are not well advised in education, in finance, in financial planning, and in how student debt works, so it is impossible for them to make decisions about the level of risk they are taking on, and it is impossible for them to design a life plan. Solution: Require a 1 semester long class that educates students about these factors Senior year, and do not allow college admission without it. OR, offer the only course through the Federal Aid Department and require it of all student before beginning any college, and before taking on ANY federal OR private student loans. Get detailed about all of the problems in this list! Focus on compound interest, how it works, and how it can ruin your life, and your credit, etc. Also, focus on VARIABLE interest rates as well!
Problem: Lenders lie to new potential and current students. Solution: see #1
Problem: Financial Aid Offices at colleges like to students. Solution: see #1
Problem: Lenders selling debts to other lenders. Solution: Stop allowing Lenders to sell student loan debt to other lenders. If a lender is so terrible at lending to students, they need to clean up their own mess, and be forced to do it. If debts are sold, it should be required that students get a discount every time their debt is sold of a fixed percentage. This causes a penalty to the student lenders, and a benefit to the student. Incentivize lenders to stop being "garbage" at their jobs & business management.
Problem: Lenders creating non-compete agreements with other lenders that refinance student debt, and lenders restricting refinancing options to ONLY people who have completed their degrees. Solution: Both of these policies are INSANE, and I do not see how it is possible for these things to be going on, like they ARE, and be legal. It needs to be stopped. Period.
Problem: Extreme compound interest rate increases, and variable interest rates, and more. Solution: Let me say this one time very clearly for the greedy people in the back: IF YOU ARE GOING TO HAVE COMPOUND INTEREST RATES ON STUDENT LOANS, THEY NEED TO ALWAYS BE FIXED RATES, LOCKED IN, PERMANENTLY FOR THE LIFE OF THE LOAN! PERIOD. END OF STORY. We all know what happened in 2007-2009 with those sketchy, no doc, variable rate mortgages, don't we?! Subprime loans! That exactly what student loans are: tricky bullshi* with no asset to back it up. It's stupid. Stop it! Our country must put a stop to this STYLE of student loan! Period!
Problem: Medical hardships, and financial hardships, of ALL kinds are IGNORED in filing for Bankruptcy, and Student Loan Debts are ETERNAL and NEVER dismissed. Solution: IF a student has a approved medical withdrawal from a semester, all that debt should be wiped away clean, period, automatically, without any bankruptcy filing. Additionally, if any person files bankruptcy in a US court, and any debts are dismissed or discounted, like credit cards for example, then ALL of the student debt MUST also be dismissed or discounted at the exact some rate of elimination, period! I can not tell you how devastating it is to have 4 pelvic surgeries, and nearly bleed to death in the hospital and have your own Federal Student Aid Government Department, and Student Lenders Private and Federal, categorize you as "not have enough hardship to be eligible for dismissal of debt". THAT IS A LIE. IT IS ABSOLUTE INSANITY. AND IT IS 100% DISCRIMINATION AGAIN THE TEMPORARILY AND PERMANETLY DISABLED. Any person who suffers a medical crisis, whether they are ever receiving disability payment from the government or NOT, are by MEDICAL definition disabled. To deny those people fair treatment of their debts and bankruptcies IS Discrimination. Period! So, stop giving special treatment to the extra greedy, and absurdly insane, student lending companies (private and federal), and dismiss those debts to an equivalent degree in court bankruptcies once and for all. AND, any person in the U.S. who has ever had to take a medical withdrawal from school, and any person in the U.S. who has ever had to file bankruptcy, should have their student debts wiped CLEAN!!! The #1 reason for bankruptcy in the US is medical crisis. Therefore the majority of those bankruptcies were the result of a medical disability, AND/OR a financial crisis. ALL are deserving of fair treatment and dismissal of debt!
Problem: Lenders lying more, and more, and more. Solution: Stop allowing Private and Federal student loans to be managed and handled by ANYONE who lives outside of the United States. US students should NEVER, EVER be forced to call customer service and get a person in a foreign country who has ZERO knowledge of our rights, our laws, and who has a lack of basic ability to speak, write, and communicate in our FIRST language: English! How can anyone expect anything to be properly or effectively handled this way?! You can't! And when this type of work is outsource the companies that own these debts and using this as a tactic to CONTINUE to mismanage debts, misinform borrowers, and to avoid being held ACCOUNTABLE! Reward companies that keep US loans serviced by US citizens who's first speaking language is English, and who are held accountable to US laws!
Problem: College's acknowledging medical withdrawal, but then holding transcripts hostage, and preventing the student from completely their degree, and preventing them from transferring to a different school, better school, more affordable school, more convenient school, or an only school that better accommodates their medical crisis or disability! Solution: AGAIN, stop allowing colleges to discriminate against the disabled and the medically disadvantaged. Period. No school, at any time, should ever be able to lock transcripts, especially not for credits which were ALREADY squared away and paid for! That is INSANE, and it is theft! Period!
Problem: Students are lied to, manipulated, and poorly advised in high-school by a plethora of people about what they should do regarding things like: How to choose a school. What school to choose. What degree to choose. What kinds of loans and grants to try for. And how much debt to take on. The ONLY person in the high school who should be allowed legally to discuss making financial decisions about the level of risk to take on in selecting and financing a high education that costs money is: Someone with a Bachelor's and Master's Degree in Finance and Financial Planning who TEACHES a Sophomore, Junior, and/or Senior Year semester long course called "Risk Assessment: Choosing You Higher Education Financial Plans and Options"
Well, I just solved our United States student debt crisis. Send the link to this blog post to your elected officials, news-stations, and friends and family. They might thank you, unless they are the CEO of Navient, then they might be unhappy with me. But we all know that I am RIGHT.
I pray that God blesses you with health, wealth, and wisdom this fine Fall day.
Amber Nestor - Firm Owner & Principal Broker