Student loan debt is a monster problem.
But it doesn't have to be, and it shouldn't be.
There are a host of reasons that have contributed to the current crisis, but here are the main issues:
- Higher education is too expensive.
- The government shouldn't be financing or guaranteeing student loan debt.
- The ability to pay back loans isn't 100% income-based.
This may seem like an insurmountable task that we couldn't possibly see resolved in our lifetimes, but that simply isn't true.
Here's the simple solution that fixes the systemic issues in higher education financing…
Greed and Government Interference Created This Mess
Colleges are expensive because we've been sold on the "fact" that higher education, no matter the cost, is a ticket to success. Students even believe that the more expensive a college is, the better their opportunities will be once they're in the job market.
To justify the exorbitant expense of higher education, colleges (including state schools) build luxury dorms, gourmet dining rooms, and lavish athletic centers to attract students.
Facilities are costly to build and run. Staffs have become egregiously bloated, not with more professors, but with administrators.
But none of that matters, as long as there's money – a lot of money – coming in to pay for it all.
And that money is there. The government guarantees student loans, meaning both lenders who make money available and investors who buy packaged student loans are protected from defaulting borrowers.
Ultimately, taxpayers are on the hook – that's what "government guaranteed" always means.
If for-profit and so-called nonprofit colleges and universities weren't lavishly government funded, they'd be far more cost-conscious, more education-minded, and infinitely more invested in the future of their students.
This Is Fixable, Pure and Simple
About the Author
Shah Gilani is the Event Trading Specialist for Money Map Press. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.