U.S. Student Debt in ‘Serious Delinquency’ Tops $166B

Right. It’s become a government backed bubble. Somehow we need to pop it softly. I’m sympathetic to all the current student debt holders and providing relief to them but if we do that without putting and end to these guaranteed loans we’re just perpetuating (and making worse) the problem.

Doing something like making community college and trade school level degrees free and leaving everything else to private loans sorta makes sense. (Arguably 80% of university graduates really didn’t need their degree for their job.)

This will be highly unpopular but it seems to me like a solution is to start doing some amount of payroll withholding for those with student loan debt similar to the way social security/Medicare is handled. It doesn’t have to be a huge amount, but enough to ensure repayment. Government forces us to “save for retirement” via social security, yet being debt-free is a far greater advantage in retirement than the retirement income supplement of social security. If people had no debt, they’d be better positioned to cover their own retirement. Paying off $100k student loan debt “now” is far more valuable to a person than social security later. Essentially what I would propose is this: your social security withholdings go towards student loans while you have student loans, once the loans are repaid, social security contributions resume. But, it’s a house of cards because those with excessive unpaid student loans are most likely the ones financially irresponsible enough to require social security for their retirement. There is also the other issue that your social security payments you make today are paying current benefits rather than your own benefits later. Social Security is a Ponzi scheme, so in practice my idea wouldn’t work as it might collapse the social security scheme; but adding federal student loan payments to payroll withholdings would potentially solve the problem. Also stricter caps on student loans sounds like good policy. There is no good reason anyone should have $100k+ in undergraduate student loans. Taking out loans to get an expensive degree from a school like NYU ought to not be allowed. Loans should be a means to assist someone in getting education — not as a means for someone to get the most expensive education possible. Practically bottomless student loans has absolutely contributed to the extraordinary inflation in higher education: college costs have risen faster than even healthcare costs, no small part of which can be blamed upon the availability of loans.

For many schools, sports are a profit center. Texas A&M for example, makes several hundred million per year from their sports. Schools like NYU with their insane tuition doesn’t even have big sports, yet it’s one of the most expensive schools around.