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Posts Tagged ‘bailout’

Bailout for Student Loans

The problem with all these bailouts is where do you draw the line.  Banks and financial institutions were bailed out, as were people who bought way too much house.  Unemployment benefits are extended again and we have “Cash for” this and “Cash for” that.  What about student loan relief for Americans who spent money trying to improve themselves?  We spend near 30K to put someone in Georgia State Penitentiary but what about the kid who graduated from Georgia State University.

The people who are constantly moaning about socialism need to consider our college finance system.  I am not sure about today but when I was in college, a kid whose father punked out on the family often qualified for a free college education.  Okay, it was not free because my parents’ tax dollars funded it.  On the other hand, I had to pay for my education and like the Obamas, that debt continued late into life.  That’s socialism or the redistribution of wealth.   

I just joined a facebook group looking into a bailout for student loan but I have my own ideas.  The federal government should take that returned TARP money and create a student loan program similar to the housing recovery deal.  The formula could involve a long payment term with zero interest for the original loan amount plus 25% of the accrued interest.  People who received other bailouts would not be eligible nor would people drive new cars with rims.  Hey, we spent some much money on the space program, Afghanistan nation-building and Ray Ray’s babies mommas; what about the people who were doing something positive.  We should remember that the federal government failed to monitor and regulate Wall Street and the economic engines—leading the high unemployment and slow student loan repayment.       

http://www.forgivestudentloandebt.com/

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Between the NFL game and the reality game Survivor’s Finals, I watched a segment on CBS’s 60 Minutes about the second wave of mortgage failures—my mouth down open. Drama on T.V. shows can be interesting but this mess will be all too real.

If you brought a house with an “adjustable ARM” loan and were not prepared for the agreed adjustment, you have issues. Here’s the simple “country common sense” formula: double your gross income and that number is the amount of house you can comfortably afford at this time. i.e. Income 45K…House 90K.

Those people to speculated that their house would increase in value before the ARM adjustment and the new equity could offset…bla …bla…bla…

Bottomline: you rolled the dice and crapped out. And the idiots who gave you the money are (well) idiotic—that basement where you could actually practice tennis with someone, that was the size of the house you need. Also, real estate people who push the market value of homes higher for their own personal gain should be assume and when the bubble burst, they must share the blame.

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Wall Street Mess 101

If you missed it, 60 Minutes had a great segment last night on one of the sources of the Wall Street Mess.  I can believe Washington allow this “side betting.”  This video is like “How to be a legal Crook” 101.  Unbelievable.  

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Am I missing something in these Wall Street/Main Street Bailout discussions: what about student loans?  Most people pay their loans back in a reasonable period and it has always seemed unfair to “bailout” those of us who did not.  Us.  We.  Me.

 

But, Wall Street speculated on financial products and projects and some homeowners bought (tried to buy) more house than they could afford.  My simple formula for homes would be double your annual income to get the cost of your starter house; pay for that house and use the money from selling that house to buy your next house; of course, the next house would be cash from the first house plus double your annual income again. 

 

This is not rocket science but the government bails out or spends money on nation building in countries that don’t like us; people who speculated that they could afford five kids on minimum wage; and even people who’s small businesses were illegal.  Yes, we spend $26,000 a year putting a fool in Georgia State Penitentiary but we let his clean-living brother get student loan debt to attend Georgia State University—I am for law and order but these criminals are bleeding us dry.

 

So, people “invest” in their educations and speculate that the economy will produce jobs to pay back the student loans.  Good kids trying to move forward in a positive way until we realize that the cost of living over 10 or 20 years when up, up, up but the incomes and benefits actually when down—I should have listened better in e-con class.

 

People are talking about adjusting the bailout plan to let failing firms and banks fail and rescuing the homeowners directly—the same homeowners with finished basements the size of the house they could really afford.   While people can walk away from real estate debt, student loan will always be around until paid– growing exponentially. 

 

My proposal is simply a “mercy rule” that caps student loan debt as double the original amount.  We can pay for it with Iraqi oil revenue.      

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