Student Debt Burden Solution Part 1
Students are deeper in debt today than ever before and two out of three college students graduate with significant debt burdens . While most colleges are struggling to keep costs under control, the cost of a college education is rising faster than the cost of medical care and as much as three times as fast as consumer prices in general.
Click here to view the 2nd video in this series.
Students borrow because they see little choice. They see college education as a key to success. However In the case of student loans, there is no walking away. Unlike most other forms of debt, student loans carry almost no consumer protections and little ability to refinance. By law, they can’t be wiped out in bankruptcy. These draconian laws would make a mobster envious.
These huge debt burdens threaten the vitality of our nation as they leave our future productive workers mired in debt and are certainly not good public policy. So is there any way the nation could help our future workers to become well educated and become productive members in our society?
Consider the following facts:
According to a congressional analysis which was published in the Washington Post , the recently enacted plan to extend the tax cuts for the rich would add more than $36 billion to the federal deficit next year — and transfer the bulk of that cash into the pockets of the nation’s millionaires.
An analysis by The Wall Street Journal found that pay and benefits at the top 25 publicly traded banks and security firms on Wall Street hit a record of $135.5 billion.
Let’s just take a look at some of the compensation that some of these people are receiving:
These people are making more than people who win the lottery jackpot and they make millions every year, year after year. These people on the average make more in one day than average worker makes in a year. And some of these same bankers received government bailout money while now they are making millions every year in compensation and bonuses.
<The government has trillions to bail out the bankers and Wall Street, but they are talking about cutting 100’s of billions which would include aid to education placing additional burdens on students.
Now these people we saw earlier are not even close to being the richest in the nation. In fact there are people that are making significantly more than they are. In fact the amounts of money that these people make are staggering:
John Paulson, the manager of Paulson & Company made a estimated 2.3 billion in personal earnings in 2009.
James Simons, the manager of Renaissance Technologies, made an estimated $2.5 billion in personal earnings in 2009.
George Soros, manager of Soros Fund Management, made an estimated $3.3 billion in personal earnings in 2009
And the top earner was David Tepper, manager of Appaloosa Management. He made $4 billion dollars in one single year in 2009.
Now consider this:
David Tepper makes $456,000 per hour for every hour of every day in the year. Hmm, I wonder if he worries what the minimum hourly wage is?
If David Tepper goes to a 2 hour movie, he will pay about $15, but he will make $912,000 in that time.
If David Tepper plays a round of golf at the country club, he will pay around $500, but will make over $2 million that afternoon.
David Tepper can purchase a $100 million yacht with under 2 weeks worth of earnings.
David Tepper can purchase an oceanfront mansion worth $100 million for under 2 weeks worth of earnings.
These people cannot spend money as fast as they make it!
So why are we pointing all this out?
A remarkable study (Norton & Ariely, 2010) reveals that Americans have no idea that the wealth distribution (defined for them in terms of “net worth”) is as concentrated as it is. Just take a look at the wealth distribution in the United States. A staggering 87% of the wealth is held by the top 10% in the nation.
So do these people really need these tax cuts when our students and their families are groaning under the weight of student loans, home foreclosures, unemployment, and other results of the economic crisis? Why are we taking good from the people who need it the most, and giving it tp the people that need it the least?
Consider this: if the recent tax cuts for the rich were repealed and the rich paid their fair share, we could have enough revenue to give every single one of the 11-1/2 million college students in the US a Pell grant for $3,130 and that would be repeated for every year they attended college.
Certainly these wealthy elites can afford to pay their fair share. Now wouldn’t helping our future productive workers be a better way to invest in our nation’s future than giving the elites more money?
In a future video, we will explore how we can make this happen. It is already happening in Great Britain.
Click here to view the 2nd video in this series.