Student loans now sit over $1.6 trillion. There are many ideas to fix the issue. In this podcast I discuss one way to do so while working within the current system. I.e. If we aren’t going to blow the system up completely, how can we work within it….
Last week I posted a question about changing student loans.
In short, this podcast explains how the student loan system put in place by those in power over the past 20 years was one designed to increase “taxes” on Middle and upper middle class families.
A few of you asked if I had some statistics on that. A new report actually came out over the weekend.
P.S. This is not a political discussion. More like “educating based on stats” because some of you asked me to put them out there for you.
High income households (>74k in income) owe almost 60% of all the student loan debt and MAKE UP 75% OF THE PAYMENTS. OF THIS 60%, 56% IS OWNED BY GRADUATE STUDENTS. This happened because in 2010 The Obama administration uncapped how much you could take for Graduate loans.
For comparison, the lowest 40% of household income earners make only 10% of the payments.
I’ve been asked if I think tuition costs for graduate school would be significantly lower if graduate student loans were capped.
Below is some data to illustrate. I took these from a high level to see a trend so they are not 1,000% accurate but close enough and illustrate my point…
Here is some food for thought:
For Health care practitioners outside of MD and MO, from ’99 to ’08 average graduate debt went from 115k to 124k or a .90% increase per year. From the end of ’08 through 2016 it went from 124k to 202k or a 6.3% increase per year. If it had continued at the same pace as the previous 8 years, the debt would’ve only been 133k vs 202k or 34% cheaper.
Again, this just illustrates my point from the podcast. Regardless of if you agree with redistribution of wealth politics or not, this is redistribution of wealth from middle to upper middle class people working almost to perfection without politicians telling you that they are increasing your taxes over 100%.