By JAMES K. FITZPATRICK
In the May 7 edition of First Teachers, a reader named J.M. offered a suggestion for how the country can extricate itself from what many see as the next financial crisis awaiting us: the likelihood that college graduates will default on the massive student loans that they are carrying, leaving taxpayers with the bill. In an op-ed in The New York Times on Sunday, June 7 entitled “Why I Defaulted on my Student Loans,” the writer, Lee Siegel, explains why he did just that, encouraging others to do the same.
Writes Siegel, “As difficult as it has been, I’ve never looked back. The millions of young people today, who collectively owe over $1 trillion in loans, may want to consider my example.” Several Democratic politicians, including Hillary Clinton, are proposing a loan forgiveness program, paid for by the taxpayers, as an alternate way to deal with the problem.
J.M.’s suggestion was that the colleges and universities, rather than banks backed by the federal government and the taxpayers, should become the source of student loans. He pointed out that “every college and university has a portfolio in its endowment fund that includes stocks, bonds, real estate, mutual funds, etc.,” and that there is no reason why “student loans could not be held as an investment in the same way as any other loan is now held. Students would pay interest on the loans (revenue for the institution just like revenue from any of its other investments) and repay capital which can again be reinvested.” … Continue Reading