OPEN LETTER TO ALL AMERICANS- I KNOW HOW TO FIX OUR FEDERAL STUDENT LOAN PROGRAM

Bold claim, right? Well, I do have the answer that solves the "riddle". Now it's a matter if anyone is going to listen. I'm going to lay it out- I'm not going to clutter this with an essay on the History of Student Loans in the United States. I'm going to tell you how I arrived at this conclusion based on my background so you know this isn't a pipedream. Let me be clear we are in a very realistic and fluid situation and I don't take this matter lightly. Student loans are a PROBLEM. But not for the reasons you think they are. It's also a solvable problem- and I'm going to attempt to solve it by sharing my ideas with my countrymen in the hope that we can, as a group, enact this change. Let's discuss a few different topics.

  1. Background, breakdown and how I came to this conclusion.

  2. What is right and what is wrong with our current model.

  3. What I call, Blanket Forgiveness.

  4. The solution.

First: How did I come to this conclusion? Mainly, my experience.

I have an enormous amount of student debt as do many other Americans and I'd like to right off the bat, fundamentally reject the following:

  1. Getting MORE of an education is a bad idea.

  2. Taking on student loan debt is a bad idea.

These concepts are the fundamentals to a modern society with highly lubed social mobility- 2 concepts:

  1. Higher education.

  2. Debt.

So let's not argue about these 2 concepts- because we all have generally accepted that these are 2 of the fundamental components to modern society. It's also irrelevant because this is where we are NOW. In a society predicated on these concepts.


Background and Breakdown


In a past life, (5 years ago) I moved from being a musician and music teacher full-time into the world of Financial Services and sales. However, like a lot of people, I was one of the people who paid an exuberant amount of money on my "liberal arts education".

When you work in financial services your job over simplified is to help people with risk management and wealth accumulation - I kept encountering a problem. (If you want to nerd out on the numbers take a look here)


Clients did not have enough money to contribute to a legitimate financial plan.


The main reason wasn't enough income or that other common misconception: "people don't want to work". Quite the contrary, the real reason was that people were crushed by debt- especially people that pursued a college education. I assure you, not only do they want to work, they are working. Or I should say: pre-pandemic, they were. Sometimes more than one job just to stay afloat. It didn't change the fact that they were drowning in various forms of debt. I left traditional financial services to pursue a new Wild West in financial services: Federal Student Loan Forgiveness only to find out some disheartening truths about the industry and climate of ALL Student Loans -NOT just Federal.


The truth is staggering. You have to look at the entire picture.


Below are some statistics

United States of America Average Saving Statistics from the Motley Fool

When you consider the amount of outstanding Student Loan debt as well as the number of borrowers it turns out an entire generation of Americans do not have enough money to save for anything! Nevermind traditional savings goals like retirement or a vacation. How many Americans suffer these woes? Literally HALF.





Literally HALF of the United States has a student loan debt problem. So as to not inundate with a dissertation on debt I want to just cover a few things and types of debt. This is part of the breakdown. It's important to categorize debt based on behavioral intention because that should perhaps determine the means of collection, default and satisfactory repayment. Take a look at this screenshot below of Investopedia's debt breakdown. I love investopedia, they are an amazing site and their information is up-to-date on point and unbiased. The way they categorized debt in the following image is indicative of the national tone.







You'll notice in this that there is NO specific category for Student Loan Debt. It isn't consumer debt. It isn't credit card debt. It's really in it's own class. Student Loan debt, especially Federal Student Loan debt is treated uniquely and incommensurate with its purpose and intent.

How Federal Student Loan repayment plans ACTUALLY work


INCOME DRIVEN REPAYMENTS

PSLF






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