[ATLANTA, GA] - “The best overall solution to the current student tuition loan crisis is to allow students to repay their loans interest-free,” says Libertarian presidential hopeful Chase Oliver.
“As president, I would seek to make all currently held government-backed student loans interest-free combined with ending the practice of government backing student loans,” says Oliver, 37. “Bring market practices and savings back to the loan business. Market forces will have colleges lowering prices.”
Student loan debt now exceeds credit card and auto loan debt in the United States, according to a report by the Council on Foreign Relations.[i] More than $1.7 trillion is owed by 43.5 million individuals. Of that amount, $1.6 trillion is in taxpayer-backed loans, the CFR report states. These loans are typically issued at lower fixed rates than private loans, and often, require no credit check.
As inflation increases - and the job market for the college-educated stagnates - more and more of those graduates are falling behind on their payments. Between 2018 and 2020, an average of half a million students were six months or more behind in their payments each quarter, according to the Office of the Federal Student Aid.[ii] About 70,000 loan holders were transferred to debt collection each quarter during those same two years, the FSA reports.
By transitioning away from government student loans to private loans, Oliver says an open, competitive marketplace will tend to keep interest rates and terms lower. Those same pressures will encourage college administrators to keep tuition in check with the student’s ability to repay the loans because private-sector lenders will limit how much they lend to untested borrowers. Open-ended funding from government loans removed spending discipline in higher education, which resulted in higher tuition and fees that make the loans so high.
Oliver says that cuts in government spending would make the plan feasible
“My plan will be revenue neutral, restore marketplace principles to higher education, and help millions of people get out from under their student loans so they can instead spend that money elsewhere instead of being nickel and dimed over government-held debt,” Oliver says. “I would rather people, regardless of their income level, to have more money to spend in the private market as opposed to being used to fund a bloated government apparatus.”
To learn more about Chase Oliver, donate, or volunteer, please visit votechaseoliver.com.
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[i] What Should the U.S. Do About Rising Student Loan Debt? (cfr.org) [ii] Federal Student Loan Portfolio | Federal Student Aid
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