I have tried to warn young people and their parents.
Not only do they not want to hear it, they make excuses — like “oh, I can work for the government for 10 years and no matter how much I rack up in loans they’ll forgive it.”
Trump is making good on Republican campaign promises to get government out of the business of student lending, and recently lifted limits on fees debt collectors can charge some defaulted borrowers. The Washington Post has reported he will propose major changes to loan repayment in his forthcoming budget, including eliminating a program that erases student debt for public-sector workers after 10 years of payments.
As I said several years ago in this column: If you in any way encourage or enable your young adult to take on this ball and chain, given that there is no way they have the life experience to understand what they’re agreeing to in full and how badly they can and will get screwed you deserve to be eaten by your progeny if they get screwed as a consequence — and they’re at least somewhat likely to have exactly that happen.
The only answer to the high college cost problem is to remove all government supports and “enhanced” treatment of such loans so they are fully able to be discharged in a bankruptcy just like any other consumer or business loan.
That would instantly collapse the cost of college because nobody in their right mind would lend someone $100,000 to get a degree in social services or similar. Ever. But no! Instead of collapsing the cost of college by 80% you keep arguing for more and more “loan access” instead.
Oh, and if you own a house today and are expecting to sell it to a millennial some day? Forget it — they won’t have any money or credit to buy it with which means that even if you have either no children or they didn’t get screwed like this you still have every reason to demand that the right thing be done and if you don’t then you deserve the outcome when it occurs.
First appeared at Market Ticker.