When it comes to higher education, America is second to none. World class professors,
exclusive liberal arts schools with manicured lawns, and the highest prices on the planet!
That is why there’s more than 1.3 trillion dollars of student debt in the U.S.
Experts think it’s more student debt than every other country in the world...combined.
And Americans can’t afford it.
There’s a long list of people who think the U.S. student loan situation is broken.
How to reform it is where the roads diverge.
So here’s the situation…
Students who borrowed for college and finished in 2014, took out an average of nearly $29,000
to pay for their education. In just the past decade, student debt has more than tripled, rising an average
of 14% a year.
And that debt burden is rippling over into other areas of American life with fewer young
adults buying homes, new cars, getting married or starting a business.
Now here’s the argument…
So what’s the real problem here? The cost of college or the loans used to pay for college?
One school of thought first championed by Senator Elizabeth Warren, and now backed by Hillary
Clinton says part of the solution is letting students refinance their loans at lower interest rates.
Clinton: "A 7-to-9 percent interest rate, when we haven't had interest rates that high
in years, it makes absolutely no sense."
President Obama has greatly expanded his own program.
Obama: "To offer millions of students the opportunity to cap their monthly student loan
payments to 10% of their income."
But critics say making it cheaper to borrow just makes it easier for schools to raise
tuition and fees.
Another suggestion?
Countries like France and Germany with less student loan debt do it way differently than
America: They have higher taxes to make public universities cheap or even free.
It’s a solution that isn’t even on the horizon in the U.S.
It also wouldn't help the millions of students currently indebted to the government for
years to come.