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Student Loan Reform

Jim Hickey, US Congress Candidate 11th District

Jim Hickey, US Congress Candidate 11th District

Here are some of the things that I am hearing on the street, while campaigning door to door over 250 miles….

Some students are thinking that College might be too expensive, and not worth going, and they are thinking they will just try to enter the workforce. I believe that this is the wrong mindset for our future leaders of the free world. America became great, because our citizens were hard working educated people. To compete in a global world, we need to continue educating our citizens. Currently only 3 out of 10 have a college degree, and only 6 out of 100 have a Master’s degree, and 1 of 100 have a PHD.

Then some citizens believe that we should forgive their loans, since they can not find a job, and can not pay their monthly payments. I would love if my loans and my wife’s loans could be forgiven, but who would pay? Ultimately someone has to pay for this debt, and this would just be a bandaid to a long term issue.

Some parent’s income is too high to qualify for student loans, and the family must get a private loan. I believe that the parent’s income should not affect the student. We need to make sure everyone has the opportunity to receive higher education.

Some are fortunate enough to have saved and invested wisely to provide for their children’s education and do not need a loan. The parents could just payoff their child’s education, but I believe that a better decision would be to invest in a business for the child after graduation, or put it towards a first home, or give them an investment account.

The Current Loan System

Here is an example of a current $40,000 student loan with an interest rate of 10%, and a term of 10 years. The payment would be $528

My Proposal

I believe that since an education is a long-term asset, we should have a long term debt associated with it. I also believe that an undergraduate education is needed just to maintain the middle class lifestyle. We need to give all Americans the opportunity to achieve the best they can be.

Since the US Government borrows money by selling US Treasuries, why not we link the interest rate on student loans to the US Treasury, and cut out the middle men(Bankers). Under my proposal, the example would be $40,000 student loan, with an interest rate linked to US Treasury of 2%, and a term of 50 years. The payment would be $105.

I believe that we could “Refinance” all current loans into this new system, and the savings would be on average $423 per student in the household per month. I believe this extra money would be spent in the local economy, and this could help stimulate local businesses. Please tell me your thoughts, I have many other solutions to America’s Problems on my website www.JimHickeyForAmerica.com.

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