New fears student loan debt is reaching dangerous levels
Rep. Hansen Clarke on his debt forgiveness bill
- Duration 5:20
- Date Apr 19, 2012
Rep. Hansen Clarke on his debt forgiveness bill
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New jobless numbers pointed to slow -- hiring.
Existing home sales slammed last month down two and a half percent and now.
Growing -- as a trillion dollar student loan debt bomb is about to implode the entire economy.
Welcome everyone I'm Stuart Varney in for Neil Cavuto this is -- world students rocked by soaring tuition costs now at dangerous levels.
More than -- million dollars I don't think a brilliant.
Some -- is the head of the nation's largest student lender today is -- -- -- -- -- the -- -- -- spiraling -- -- control.
-- chief Albert Lord saying I'm quoting we don't see any evidence of anything close to a bubble.
But also soaring.
Tuition and fees at four year schools up 300%.
In the last ten years the -- Average college grad now saddled with 23000.
Dollars in debt that -- to a 150000.
Most of the 400000.
The medical school students and now reports that some of those students may be starting to buckle.
Putting off purchasing new cause putting off marriage putting our kids and putting off their parents -- staying at home longer.
In some cases forcing -- month to take out loans.
Now my next guest says he has the solution it is cold the student loan forgiveness act of 2012.
Now I won't he won't Colin about -- out.
I will call -- a bailout Michigan down.
Hansen Clarke joins me now congressman welcome to the program it just for the -- at the time I just want to paraphrase your plan.
If a student has given 10% of his or -- disposable income paying off the student loan for ten years.
Anything that they over above that you would full give.
Now that's that's a bailout isn't it.
Well right now the taxpayers as you and Dave Ramsey of -- rightfully noted a month ago on your show -- on the hook for a lot of this money right now so I put together a bill that hasn't mandatory repayment plan.
So that -- current borrowers who make payments according to their income ten for -- discretionary income for ten years.
Will likely have those loans paid down if not.
Paid off altogether but if I don't think I don't read about it or not but if they're not -- awful to get.
Then the taxpayer is on the -- automatically after those ten years -- well you know we're on the hook right now although as you rightly said the taxpayers are on the hook now and.
-- but -- also will pay.
Under your system a student loan that's the you pay 10% of disposable income for ten years you do that.
You've met the terms of your bill -- that point attacks but is right on the -- and the taxpayer pays up that's a bailout.
But the the point is the textures are on the hook right now of that.
Student loan borrower defaults.
And there are many borrowers right now who can't even pay down on these on these loans so -- provide every Bauer and their -- -- -- of bot.
Broad a lot of money to to send their kids to school I provide them with a manageable way that it pay off their debt if there is anything left over yes they will get really exactly -- -- -- -- the -- -- -- a taxpayer has to pay you not fixing the problem you're not yes well look -- here you know I'm sure the whole -- was second we need jobs we have to increase the purchasing power of our borrowers.
They can't even spend money to start their own business the -- home.
To invest that's how you create jobs it's not through the government necessarily it's by increasing the purchasing power of private citizens then you -- I don't does then.
You are saying that after ten years pay 10% -- -- disposable income for ten years.
At that point all of that debt that's outstanding for -- student is wiped out the -- -- picks up the bill.
And you say that that will create jobs allow youngsters to go ahead by a house by acog -- all without lots and stimulate the economy.
That's your solution but it's not a solution to the underlying problem is it.
There's two problems.
Tuition rates are going up but also to you know we've been bought into this myth that.
If you go to school and graduate -- get a good paying job a myth that you and Dave Ramsey so rightfully pointed out.
So this is one reason why we want to at least.
Relieve our students and parents from this the burden.
So they can start creating jobs to see it yet you could as Americans you could get a better at all last point yes I've got assured that -- You -- accused of buying votes with taxpayer money couldn't you.
Oh no you don't like that the money that we're using we're already spending at an Iraq and Afghanistan -- -- -- direct threat to Canada can't sit down this that you can don't know about paying port right now.
What the lack of jobs with people who were in debt for decades almost the rest of their -- That's unimaginable that's unspeakable the government shouldn't have that kind of power to destroy people's lives like -- see these loans were supposed to provide an opportunity for people but also.
For our country the more well trained we are as the workforce or more likely we can attract jobs around the world to the US and compete.
Against China in -- Iran has.
It was gonna have -- -- that we can always looking at the respectfully disagree I say it's a bailout you don't we disagree -- -- have to leave it right back -- -- clock we do appreciate you being with -- those -- thank you you're very welcome Stuart take care -- so that.