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Student Loan Debt is YOUR Problem Even If You Don’t Have Any.

After Bernie Sanders announced that he was running for president (again) a video of one of his supporters holding up a sign indicating that she’s all in for him because of her $226,000 in student loan debt. Attacks on Twitter were merciless. Of course getting that far in debt for any degree was a pretty stupid move. But saying “too bad, Snowflake. That’s YOUR problem” is unhelpful AND wrong. Because it IS our problem.

First of all, the Department of Education is now the sole lender for the federal student loan program (thank you, Obama.) In other words, this kid borrowed the money from the federal government. Or, in other words, she borrowed the money from the tax payers. If she doesn’t pay it back, that’s YOUR money that just went out the window.

No, you don’t have to go into debt to graduate from college. Yes, there are plenty of alternatives for getting a high paying job. But it’s too late for students like this who are already in debt for degrees they can’t pay for. And you can do the right thing and be responsible and pay your own way and pay for your own children’s education, but you will still be on the hook for what other people and their children borrow to pay for college.

Second, how in the world did the people who gave her this money ever expect to be paid back? Median salary for a speech therapist (which is what her expensive degree is apparently in) is around $70,000 a year. That’s above the national median salary. But if she’s just starting out she’s probably earning less than that. The current interest rates on federal student loans is 5.5%. Calculate that $226K debt at that rate over 20 years and she’s looking at monthly payments of almost $1500 a month! If she’s earning the median salary for her profession, she’s taking home around $4.000 a month, leaving $2500 for rent, utilities, food, etc. Not to mention saving for retirement.

Can it be done? Sure. I know people who live on less than that. But what if she’s not earning that much? Well, the good people at the student loan department have these handy “income contingent” payment plans. That would allow her to pay less. But the interest rate remains the same. Often times, the monthly payments are less than the interest accruing on the loan. What if she loses her job? Gets sick? Again, the government will gladly grant her a deferment for that period. But the interest keeps adding up. And if she applies for a loan forgiveness program? Then she’ll make what payments she can and if she fills out all the right forms properly and pays on time, her remaining debt will be forgiven. And who pays the rest of it?

That’s right: YOU DO!

Chances are she’ll probably live with her parents for a few years. She may never be able to buy her own house. She may not have adequate retirement savings. This debt may affect her choice on how many children she has – or if she has children at all. I know because 30 years ago I WAS her. Not $226,000 but more than I could afford to pay for a very long time.

The big difference is that I was in debt before all the cool kids were doing it and my sob story was literally nobody’s problem but my own. I finally paid it all off by selling my mother’s house that she left me. I even had enough left over to put a big down payment on my current home. So, I won’t be a burden to the American tax payers.

But this young woman has a lot of company. What happens to our construction boom if millions of Millennials forego home ownership? What happens to our economy if instead of investing in new businesses they’re paying off old debt? What happens to Social Security if we don’t have new citizens paying into it?

Right now, Americans between the ages of 19-29 are a cumulative $1trillion in debt. $378.9 billion of that is for student loans. 11% of them are 90 days behind. This will affect their credit ratings, which again will affect their ability to buy homes, and even find jobs or get insurance.

Democrats have a solution to all of this: free college! That’s why so many of them are supporting Bernie.

That’s another reason you should care about student loan debt. Because student loan debts are another reason young people find the allure of socialism so appealing.

(And I’ll save you all the trouble of commenting here that I didn’t offer any solutions because that will be the subject of my NEXT column.)


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