No national crisis, including the immigration problem, exceeds the volume and across the board applicability to all taxpayers as the student loan debt of this country. Government agencies current lists outstanding student loan debt at 44 million debtors owing $1.5 trillion. More than half of those debtors will be repaying debt into their retirement. Obviously, we are at the breaking point where a solution must be sought.
There is, in fact, a glimmer of hope for taxpayers as well as existing students and new students entering post-secondary education. New York University just announced its “tuition free” program of its medical school. This program, instantly effective, means an elimination of an average of $200,000 of debt for graduating physicians. NYU trustee and Home Depot co-founder, Ken Langone along with his wife, are personally funding this program. Additionally, the state of Tennessee just passed a law creating a tuition-free education at the University of Tennessee for families earning $54,000 per year or less beginning with the fall 2019 term for all students. The UT program means 47 percent of the new class will be able to graduate debt free.
In addition to the proposed NYU Medical School plan, New York Gov. Andrew Cuomo has announced a proposed statewide loan program for all curriculum where student loan debt erasure is tied to mandatory service instate for up to three years with service in rural and intercity deprived areas. For instance, a graduating medical student or law student would be required to service needy communities in exchange for forgiven debt. This program is for families earning $125,000 per year or less and, of course, would require taxpayer funding initially.
No taxpayer is exempt from worry about what to do about student loans. Obviously, as taxpayers we will all ended up footing the bill. As parents, you and I must face this issue every month as we write the check to repay student debt.
If you are one of those voters who is looking to blame the major banks for this mess, remember the federal student loan program was taken over in 2009 by President Barack Obama with commercial banks no longer being involved.
Sources: CBS News, “60 Minutes;” April 7; New York Times, April 5; U.S. Office of Education, Federal Student Loan Program
James W. Anderson