The $2 Trillion Dollar Student Loan Scam

Student debt in the United States, it is greater than $1.7 trillion. When President Biden says forgive the debt, what he really means is let's shift the burden to taxpayers. Every taxpayer would be responsible for somewhere around 12 to $15,000.

Let's say that you purchased a lottery ticket. You were fortunate enough to win. Now, what if you were told that your winnings had to be split with millions of people, none of which helped you select the winning numbers or helped you pay for the ticket?

Hey everyone, welcome to another edition of We're Talking Money. I'm Phil Clark, your host. Today we're going to dive into a really hot topic, and that is: is student debt the responsibility of taxpayers? There's a lot of controversy around this subject, but stick with me as we explore some of the finer points. Let's get started.

First off, let's look at the numbers. Now, today is July 26. The student debt in the United States, it is greater than 1.7 trillion dollar, and it affects millions of students or former students. But here's the thing: President Biden has once again come back to the table with this notion of forgiving a lot of this student debt.

"Thanks to what we're doing, that student debt is no longer holding you back."

And I agree, it's a huge burden to the people that have the debt. Now, when President Biden says forgive the debt, he's not saying or suggesting that the debt just gets erased. What he really means is let's shift the burden to taxpayers, because whoever issued the debt still needs to be paid. For those people who didn't take out these loans, why should they be responsible for paying them?

Now, keep in mind, this is not meant to be political. President Biden is not the only person who believes this debt should be repaid by the taxpayers. Plenty of other people support that notion. Is it the right notion? Put it in the comments below and let me know. Is that a win-win when someone who didn't take the debt ends up paying the debt?

So let's break this down a little further. When we take on debt, that is a significant decision, regardless of what it's to be used for. In this case, education. This kind of debt, we would say it's an investment in oneself, and like any investment, there comes an opportunity for reward, but it's also full of risk.

Some people will choose more affordable schools. They'll even work while they're going to school to help minimize the bite of all that debt. Others, they'll opt for more expensive institutions with a hope that it'll be worth it in the long run. But these are all personal choices, and personal choices come with responsibilities.

Let's say that you purchased a lottery ticket and you were fortunate enough to win. Now, what if you were told that your winnings had to be split with millions of people, none of which helped you select the winning numbers or, more importantly, helped you pay for the ticket?

Shifting this debt to taxpayers, it means that everyone, whether they went to college or not, ends up paying the debt that was born by someone else's decision. Just imagine for a moment that you're someone who chose not to go to college, to save money or because you didn't want the debt, and you ended up learning a trade. You went into business. Should you be responsible for paying off someone else's student loan?

On the one hand, the answer seems obvious. On the other hand, there could be situations where it does make sense to shift this burden to taxpayers.

Let me share this with you in another way. Personal responsibility is a cornerstone to financial independence. When we take on debt, we've made a promise. It's an obligation that we've committed ourselves to, and honoring that promise is crucial. Our word is a binding thing. It should be worth something.

If we start shifting these personal debts on a society, we run the risk of undermining this principle, and none of this is sustainable in the long run. We need to think about the message that we're conveying to future generations. If we forgive student debt today, who's to say that students tomorrow won't believe that it's okay for them to take on incredible amounts of debt and expect that someone will take care of their expenses, even though they made the choice? A byproduct of this could be higher tuition and, of course, financial instability.

Now, don't get me wrong, I'm not saying that student debt isn't a problem. It is a crisis, for sure, and it needs to be addressed. But I don't believe that the solution should be passing the buck to taxpayers. Shifting $1.7 trillion or more onto taxpayers means that every taxpayer would be responsible for somewhere around 12 to $15,000. That is a big ask.

Perhaps a better idea would be to focus on trying to make education more affordable, giving more financial literacy, even creating programs where students can learn while they earn. In this way, we can get to the root of the problem. Otherwise, it's just a Band-Aid, and we create the potential environment of really bad behavior.

So what can we do to make that a reality? First, we can support policies that aim to lower tuition cost. We can make scholarships more available. We can make grants more available. And we can focus on financial education that has been missing for a long time.

One other thing is to encourage universities to be more transparent about their cost and to be open about their education programs and how effective they are in the lives of the very students who are getting degrees from these institutions. We need to have open and honest conversations about the value of higher education and the responsibilities that come with it.

To sum it up, when we take on student loans, that's a personal choice, and with choice comes responsibility. Now, based on everything that we've read and studied, shifting this burden to taxpayers is not the right answer. I think it is working hard to make education more affordable and making decisions to take on debt with greater clarity and foresight.

Thank you for watching, and if you found this content helpful, I hope that you will give us a thumbs up, subscribe to our channel, and leave your comments in the section below. I'd love to hear what you think about this controversial subject. Stay informed, stay responsible, and I'll see you next time on We're Talking Money.