Home > Economic > Student Debt Burden Solution Part 1

Student Debt Burden Solution Part 1

Student Debt Burden from Illusionist on Vimeo.

Crushing student debt burdenStudents 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:

Wonder if they worry about the minimum wage?

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.

Should we give them a tax cut?
It seems the government has trillions of dollars, that would be thousands of billions of dollars to bail out the bankers and Wall Street, but want to make cuts that help students and schools.

Should we gave these people a tax cut?<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?

The rich are getting most of the tax cuts
Because once all of the tax cuts are finally phased in, a staggering 52.5 percent of the benefits will go to the richest 5 percent of taxpayers.

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.

Student protest
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.

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  1. Spinner
    February 21, 2011 at 12:55 PM

    Great video. I think we need to tax the rich so they carry their fair share.

  2. Jessica
    February 22, 2011 at 10:42 AM

    I am a college student and am very concerned about the debt load I will have to carry. This video really showed me how the rich are taking more and more out of the economy and leaving the rest of us to struggle.

  3. Almira
    February 22, 2011 at 12:27 PM

    The country bailed out the banks, but neglects its students. I am looking forward to seeing what the next video will propose. What can we do about this?

  4. Joey M.
    February 22, 2011 at 2:22 PM

    Love the video. All I see is the country suffering while the rich just keep getting richer. Now they want to balance the budgets on our backs? No way, I say screw those pricks.

  5. February 23, 2011 at 1:25 AM

    Nowaday graduated students have a lot if debt with them after they finish college.
    In my case I pay alot of money on the tuition because I have to pay internatiional rate.

  6. Jennifer O'Donnell
    February 23, 2011 at 2:22 PM

    I am sitting here with my jaw on the desk. I knew it was bad, but you really educated me. I am going back to school because my husband can retire in about 3 years. We have little children and probably cannot live on his pension alone. If his pension is not taken away by the time he retires. Instead of working a job, I wanted a career. I can see that a career is going to cost me big before I can even work a day.

    It is a shame where our country has been headed for a long time. The rich get richer and the poor get poorer.

    Thank you for chosing this topic. I will be following it closly to see what I can do to make a difference.

    • February 24, 2011 at 6:02 PM

      Thank you for taking the time to inform yourself on this issue. Unfortunately it not just students who are struggling in this economic environment, it is entire families that are being impacted.

      What is happening again is the classic divide and conquer. The elites have whipped up public fury at the public workers because they still have benefits and the public pays taxes for this. By doing so, it takes our attention off of the glaring inequality that exists and has us fighting among ourselves.

      However, instead of asking the question:
      “Why does the bus mechanic working for the state have benefits?”,

      the question should be:
      “Why don’t I have these benefits?”

      Future posts on this blog will outline clearly how we can use technology to successfully force the financial elites to pay their fair share.

  7. shamir
    February 24, 2011 at 10:02 AM

    I too did not know how bad this was. Did u make the video yourself?

    • February 24, 2011 at 5:23 PM

      I did make the video myself. I decided that using video to communicate to people has more impact than simply just writing. When people can see things, hear them as well as read them, they tend to remember and understand better.

  8. February 24, 2011 at 11:31 AM

    Great Video,

    This is the truth I have friends who either dropped out of college or switched career paths. And now they are swimming under debt.

    And the part of the CEO’s making this much money is insane.

    As a history major I learned that before the 80’s most CEO’s only earned no more then 256 (hard time remembering the exact number) times the salary of the lowest paid employee.

    And the trickle down economics don’t work we have practiced it for 30 years and nothing positive has happened. The rich don’t spend their money on factory’s or anything like that because they get to keep so much of their money.

    Josh

    P.S.

    I hate Democrats As much as Republicans

    Both parties fight in public but are friends behind the scenes.

    WE need like 5 or 6 different parties in our country.

    • February 24, 2011 at 5:30 PM

      I understand completely just how you feel. If you really think about it, there should be 2 political parties in the US. Once would have 1% of the vote, and would be made up of Wall St types, hedge fund managers, bankers, etc and would be heavily concentrated in the North East. The other party would have 99% of the vote and would be the rest of us against them.

      However, the elites have successfully used corporate controlled media to instigate the classic divide and conquer which has us fighting among ourselves in an essentially meaningless liberal/conservative divide, while they watch us fragment into 2 roughly equal political parties that BOTH do their bidding.

      Next time you hear the idealogues of either side trying to whip up emotional anger, be aware of what they are doing and simply tune them out and if everyone did that, they would soon become irrelevant.

      We also need instant runoff elections that would allow 3rd and 4th parties to succesfully compete in the electoral process. I also was frustrated with both the Democrats and the Republicans and in the last election cycle I was the campaign coordinator for the candidate for the 1st Congressional district in NJ for the Green Party. Of course he lost, but at least I was out there not accepting the status quo.

  9. Matt
    February 26, 2011 at 4:42 PM

    trying to find you on facebook

  10. Andrew
    February 26, 2011 at 5:51 PM

    this has waked me up
    did not know that

  11. Fritz
    March 17, 2011 at 2:30 AM

    Most of you are way off…the more money we throw at education the worse it gets ie. much of the money is wasted on community colleges for people who never did crap in school who now get this money for achieving nothing nor will most ever achieve from this education and the rich pay more than their fair share of taxes. I would much rather see them spend their own money than the government as they have proven their success with money unlike our government and all the people who want their money for free!!!!!!!!!!!!!!!

  12. Fritz
    March 17, 2011 at 2:38 AM

    dont you all get it…the more the government gives in loans and grants the more they charge for tuition, “the dog chasing its tail” if the government cut outall loans and grants, what do you think the colleges would have to do…thats right drop their prices or go out of business, the rich are not the problem the government is!

    • March 17, 2011 at 2:50 PM

      Fritz,
      If the government cut out all aid to education, all college education would cost what the private colleges charge. Of course if you are a child of the “master class”, this is not a bad thing since the vast majority of Americans will no longer be able to afford education and would therfore not be competing with the children of the “working class” leaving the “master class” to make even more money.

      The down side however would be that we would no longer have a highly educated workforce and our standard of living will fall even more than it has up to this point. However, again this would not really bother the master class that much since income inequality is not really a very big issue when you are at the top of the income pyramid.

      You say the rich pay their fair share of taxes:

      FACT: According to IRS data the wealthiest pay an EFFECTIVE TAX RATE of 17%. This is less than their secretaries, gardeners, nannies, and chauffeurs.

      FACT: You have more money in your wallet right now at this moment than the taxes paid by GE, Exxon, and Bank of America combined.

      So how are the rich paying their fair share?

  13. March 17, 2011 at 2:54 PM

    Too Bad nothing will change…

    People would have to be up in arms about it for anything to happen.

    And I don’t mean the privately funded Tea party. Which only fights more for corporate control.

    http://www.nytimes.com/2010/08/29/opinion/29rich.html

  14. RatsAss
    March 22, 2011 at 10:08 AM

    The same people who stole the tea party movement are the ones controlling our cops

  15. Joshua Gavina
    December 4, 2011 at 1:46 PM

    I’m invested in silver, so when I graduate from college, I will have 3-5K worth of silver. This will help ease the burden of my college debt, which will be around 20K-25K. Note: I have no intention of selling my silver unless I HAVE to. I am confident that accounting is a good field for me. Even the experts who claim that college education is bad approves of accounting. This high demand job will grow even higher as the government has no intention of removing any tax laws.

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    • May 8, 2013 at 5:19 PM

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