Article By: Jim Porter – September 16, 2022
I have seen student loan success stories and sad ones, too, over the past 33 years. The sad ones are the stories that Sens. Bernie Sanders, Elizabeth Warren and President Joe Biden have been talking about on the campaign trail over the past few years.
Free college and debt forgiveness sounds good, but this means all the Americans who didn’t attend college and those who did over the past 40 years and paid off their debt will have to cover this multitrillion-dollar expense via more federal and state taxes.
The sad stories I have seen vary from the hard-working single mom who enrolled in a “for profit” technical school, diligently studied and successfully obtained a certificate to become a medical assistant only to find out later the job she would get pays $17 per hour, to the advanced degree architect who graduated after six years of college with a starting salary of $75,000. The single mom owes $28,000 and the architect owes $375,000 and both now have federally insured loans that are not dischargeable in bankruptcy.
The sad part of this is the single mom thought she was doing something to get ahead and move up to the middle class, and the young architect wasn’t financially savvy enough to avoid the huge amount of easy money she was able to borrow for tuition and housing.
The federal government now owns more than $1.7 trillion in student loan debt, which is $400 billion more than all the automobile loans in America, and a ton of this student loan debt is in default, which damages FICO scores and homeownership affordability.
Successful student loan stories are plentiful right here in Solano County. I have helped at least 3,000 people since 1989 buy homes who benefitted from their college degrees that were intelligently and carefully financed by federally insured student loans. I have also had to turn down more than 1,000 people since 1989 because of defaulted and/or excessive student loan debt.
I have no bright ideas on how to fix this problem, but I can tell you the key to a solution is teaching financial literacy and how to achieve the American dream beginning in sixth grade and all the way through high school.
Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.
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