New push to forgive student loan debt
Would it create jobs or taxpayer headaches?
- Duration 9:08
- Date Apr 21, 2012
Would it create jobs or taxpayer headaches?
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We're giving student loan -- will create jobs in America that is the idea behind the new bill -- -- trying to -- -- A one trillion dollar debt bomb in the US but will this latest bailout plan put Americans back to work all or does blow open the pace of tax payers.
However body and shock -- sunny and welcome to cash and end.
Grin as -- got Wayne Rogers out of about it Tracy -- John late -- and joining us this week the president of Mercer & Associates.
David Mercer so walkabout all of -- Tracy start with you today -- for giving personal loan debt.
It's supposed to create jobs isn't even a good idea or is this -- horrible for taxpayers left in my heart.
Leads Protestants at their carrying these loans average loan is about 2728000.
Dollars -- to create jobs.
This is nonsense it's not helping the problem the problem is.
Lenders -- gives loans to anybody with a Social Security number and school -- this so they keep raising tuition only knowing these kids can go get funding.
Quite frankly they raise tuition while you're in the school what during your four years there.
That's the unfair part -- -- -- is doing nothing but putting -- burden on the taxpayer and starting.
A bubble all over again you know when she makes a great point about the cost issue mean 55% a -- right now graduating.
-- is still loan that that's a big burden on them.
Should we just forget bit as they want to do in DC.
Well you know one of the unfortunate things about this is you can't file for bankruptcy on a student loan you'll be prevented from doing that they can go after you for the rest of your life.
That should be changed because this is -- this is the fastest growing.
-- death -- category that we have of the United States more so than anything else.
And it's not gonna help us because it's a -- against the future yes they've got to find a way to deal with it maybe meaning yes you have got I know it was bits -- not the right thing to say from a moral point of view but.
Ultimately you gonna have to settle this -- -- less than -- did you know less than what's at face value.
And you know what David if if you look at the overall economy here's why this matters because it's -- is the youth generation.
The gen Y fuel eighteen to 34 years old they're the ones they don't have a 401K they're saddled with all this step over a trillion dollars now on out settings it'll and that that's -- -- cars that's more than credit cards.
And -- the ones that we need to build the economy are we in trouble.
We are in trouble in what the president has tried to do and what some members of congress are trying to do.
Is given the current economic situation.
To provide conditions that allow for students to actually pay back their loans whether it's reducing the term of the loan.
Keep in the interest rates low look we've done that for banks we try to negotiate with corporations -- they try to have.
Negotiations -- taxpayers in the government to lower their rates there's no reason why students shouldn't be able to do the same so that they can afford to go I call it carries -- pay back their loans.
And the com also have more discretionary income to be consumers in a consumer driven economy such.
And that's that's the thing I can't comprehend that there's more there's more consumer spending and jobs are created is up flying your mind.
Not doesn't fly it doesn't even get off the ground Cheryl I mean there is no mention of public education in the constitution at ball.
But what we have today a government monopoly and education we've -- -- -- laughing but we've established and nothing has stayed doesn't have to be every time -- -- -- to -- -- -- -- that direction and if it's right there -- this.
But what if the right thing to do what is this stealing from the taxpayer did David I mean more forgiveness is taking money from people who earned it and giving it to those eleven you know the important race for my Helen's remarks -- revenue base.
Well they're actually providing that -- are gonna be that's another practice -- and other stocks what offshore havens.
Does that -- expensive and generally exhibit one here totally different I think let's talk about the kids don't -- though I can't tempers that get that a subtle look all of this that would actually is just party because obviously you want them.
To -- we get higher education.
But stress his point was a good one -- it's too costly.
They've got to get these loans and they're going to the government they're not going to private.
Wonders yeah what Tracy lane is talking about is exactly right this is is exploded this student loan debt right now and there's two separate ways to look at this this is -- -- up public debt which the government is backing a subsidized to some extent what David is talking about.
-- keeping interest rates at 3.4 percent as compared to six point 8% which is scheduled to go up to in July that is a government subsidy.
That has an interest rate that is a reasonable it is six point 8% the problem is the for profit colleges.
These guys are absolute criminals they are raking these kids -- -- getting these kids because you cannot default in a bankruptcy.
And so they're just settling these kids would debt they -- that -- already.
Anyway it is still going to battle John.
You know it's that you got a whole system that's dominated by government and you're blaming the one tiny sliver that happens happens to be free that happens to be trying to act in a for profit -- I think.
-- But that's not really made it look at the university's John Muir and back at guys and got my given him.
If I can hit kids and the worst is.
Think petitions these universities have you -- -- to bring to listen.
When he did in the outlook button for your term I think I'm a parent I -- why I think that is why can't I.
-- -- You'll -- the message you're sending to the students that you all want to help so much all don't worry about the -- you took out all you have to pay those back on my god who weren't credit.
Means to believe if you -- believe that somebody gonna pay act alone why we are making loans and the first.
Because your teens.
Why these banks are given loans they know that for the rest of their life -- can -- that little -- -- let's.
Well I -- out what what time that you always know something else that kind of came up this week I've got incredibly interesting and that is that again going back to Generation Y.
There -- delaying.
Having children they're delaying buying homes and in -- delaying any type of meaningful.
Push into the US economy we've got unemployment at eight point 2% right now.
That could stay the same if you have an economy that goes nowhere because you've got -- entire generation of -- this is sitting on their hands.
Well yes -- -- come back to what I said before you've got to change this -- about the bankruptcy part because if people are making laws because they know that they -- they've -- -- collect -- -- chase -- for the rest of that but putting that -- we have some systemic things about unemployment in this country -- have to do with education.
And -- I'm personally involved in one in that's in the garment business all the garment business is gone overseas.
Why has it gone overseas and why will it never come back.
It won't come back because the generation of my mother who have a sewing machine -- people who made and so did did those things.
That's gone kids don't do that today you'll don't do that you'll forgive me no but -- we ignore -- knowing how he does do it Melissa -- lawyers haven't been.
And that is -- kind of what's -- and those jobs are gone -- update and security service.
Let me let me go to you -- I -- attributes that -- make an interesting point here about the fact that.
This this this younger generation is maybe a bit lazy I don't think you part of the -- me I guess he did.
But the -- time that went about the job's not good -- good note David Mercer they say good point about the jobs.
Sure listen we need to stay on point this is not to outright forgive the loans in the balance is that they have outstanding.
It is to make the rates in common with what we're seeing in the environment now in the financial environment secondly instead of 25 year terms on the loan.
Make it's when he instead of it being 50% of their monthly income.
Make it 10% of their income so that they can manage their way through paying these loans back if I went out and then he'd already lets -- crack and I -- -- -- -- leading them.
If you leave them with a little more discretionary income allowing them to pay their bills.
You hopefully are creating consumer demand again going back to jobs but -- -- -- have creating an educated workforce.
That's affording their education so that they -- come into the -- -- -- -- -- -- -- -- -- dollar may think the better spreadsheet write a better set of number crunchers to figure out how to apply a government entitlement that's not even listed in the constitution shall we -- He got older coaches I know did GRE bill provided a hole instead of educated ability -- And he got up early to Wayne's point rate two things happen here one wants a simple.
A lot of people aren't employed so they stayed in school longer they went for graduate degrees that's why there's more loans out there.
And -- I think the point he was making is that there's this societal need to put everybody in college and we need people to so we need people who.
Can do all blue -- -- that are used to be so taboo we're losing them to other countries and that I think is part of the reason why these there's a trillion dollars in student.
But Antonio and everybody and they'll -- they'll be gone forever that's the problem funny enough to get -- -- counters are actually the ones that are getting jobs right now the engineers out there.