re: Elizabeth Warren's Answer For Student Loan Debt - Tax Rich People

quote:

---

You're one of the smarter financial guys on this board, I'm interested in what you would do to fix the problem.

---

Well there are a couple of issues. Those that are retrospective, and those that are prospective.

Retrospective:
The loans that are out there are what they are. Not much to do but tweak a bad thing, i.e., Tax deduction for interest. In instances of hardship, reduced interest and extended payment periods to cover some of the government guarantees.

Prospective:
* Hold schools responsible for their product, either by disclosure, monetary penalty or both.
* Allocate loan guarantee amounts by degree/profession. * Banks could lend all they wanted to a kid studying art history at Tulane, but the government would only guarantee a fraction of the loan. On the other hand, degrees with more reliable job prospects (e.g., accounting, engineering, nursing, etc) would see substantially higher guarantees.
* I would also predicate guarantees based on in-state public college tuition/room-board/COL rates. Any thing beyond that would entail only a partial guarantee.
* Tuition would be tax deductible at least for most families. Tax deductibility of Tuition would encourage families to share a larger burden.