I write to add to a recent letter by Larry Penner of Great Neck, NY, about Biden’s latest student loan forgiveness program. I really liked the points he made but Mr. Penner has been smoke screened like many others into thinking this is a bailout for deadbeat college educated borrowers. Well, it is, but it really is once again another bank bailout.
Once again, banks loaned out bucket loads of money to people with no collateral and very little guarantee that they could ever afford to pay it back. Now that student loan default has become a smoldering financial crisis our tax dollars has footed the bill.
The U.S. government pushed a program that seemed like a good idea but had a flimsy infrastructure to prevent exploitation. It was supposed to just enable people access to higher education but it opened up the door for exponential college tuition increases and interest rate gouging. How can a college charge $100,000 for a degree in a field that has very vague job prospects with a low salary ceiling? How does a bank charge interest on a student loan that was 4-5% higher than what they were charging for a mortgage or a personal loan at the time? Once again, just another way for big profits to be made and the people get left with the bill. We the people shouldn’t be paying for those profits.
A fair solution could include interest deferment as long as you keep up with your principal payments. The banks should eat the interest. For those that can prove actual financial hardship the colleges should be subsidizing their payments with some of that extra cash they pocketed. But that would be something that made sense, not something that came out of Washington.
Bob Linguanti
Warwick