Lowering the interest rates and capping the maximum payments as a portion of income is the easy part of alleviating a paralyzing student loan burden. Getting bloated schools to restructure and deflate their fees to more affordable pricing (now that student debt has hit toxic levels) will be the harder but necessary part of the puzzle.
The $1.2 trillion student loan problem is easy to fix if Congress has the will to do it, Sen. Elizabeth Warren, D-Mass., told CNBC Tuesday…
For-profit colleges are covering 10 percent of all students, “sucking down” 25 percent of student loans and are responsible for about 48 percent of all student loan defaults, she said. And it’s the taxpayers and students on the hook for those loans—not the college.
“We need to align the incentives so that colleges have an incentive to keep down their costs … to graduate students on time with degrees in areas where they’re going to be able to get jobs and going to be able to pay back those loans,” Warren said. Here is a direct video link.
More on the math of schools acting like taxpayer subsidized hedge funds…Here is a direct video link.
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