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Raising the loan rates as the federal government is expected to do mid-year for Stafford Loans will help about as much as putting all the student laggards in a debtor’s prison. This is not part of my solution. About Seven million students have enjoyed “reduced rate” Stafford loans to help them get through college. The interest rate on these loans is scheduled to double on July 1, 2012. It is going from 3.4 percent to 6.8 percent unless Congress acts. The House has already passed the necessary legislation to do so and the Senate is planning a similar action. This will raise costs by an average of $1,000 each, according to the White House. While many students are already in default, a thousand dollar increase surely will not help them, and when students default, they ruin their lives, and it costs us all. Ask yourself why interest rates are so high on student loans. They are higher than mortgages. How is that? Ask Congress!

Students with a debt of $100,000 or more, and there are more and more of them, face payments well over $1,000 per month. That is tough to pay when you are unemployed. It is tough to pay if you are on Social Security. That is why over 5 million student borrowers have already defaulted and more default every day. When I paid off my National Defense Student Loan (NDSL) in the 1970’s, my payments were just over $10.00 per month. I paid it off as soon as I could as it was an annoyance. I also had a PA State low interest loan and its payments were closer to $25.00 per month. It took a little longer to pay this off but by the time I was married at 27 years old, all of my student loan debts were paid. This is not possible today.

Today’s students are looking at big payments for a long, long time and while they are making those payments, they are postponing serious relationships, postponing starting a family, and postponing buying a new home. They simply cannot afford it and the more oppressive the government makes payback terms, the more likely student borrowers will simply give-up. That surely does not help the US taxpayers or those who build homes for a living.

Can Mighty Mouse save us all? “Here I come to save the day… that means that Mighty Mouse is on his way!” Don’t count on it but the Mighty Obama has taken his swipe at the problem and it has been recorded.

On Oct. 26, 2011 President Obama decided to save the world—again. He came out with a new initiative that would allow student borrowers to cap their loan repayments at 10 percent of their discretionary income starting some time in 2012, two years earlier than the same act that was passed by Congress. Obama likes doing things without Congress.

In October 2011, ABC reported that Obama said: “We can’t wait for Congress to do its job. So where they won’t act, I will.” Upon inspection, unfortunately, as well intentioned as it might have been, the Obama plan does not help those who already have had student loans (pre 2008). I have a better plan than Obama’s for potential borrowers and at the end of this op-ed; you will see I have a solution for those student borrowers and their parents who are already stuck in the mire.

Unless you are convinced that you can be in the top 25% of your class, and you are willing to work unbelievably hard to assure your class rank, get a job right now; do not go to college full-time. Take a few courses at a time in your spare time. Do not take out any student loans.

When a reader named Sue commented on the ABC report of Obama’s initiative on their News site, she offered the best advice I have seen in a long time to assure new students that are not now swamped by student debt, to avoid ever getting into the big student borrowing hole. Sue responded with tremendous insight into the real problem today with student loans – the 800 pound gorilla in the room that nobody wants to talk about. In Sue’s words: “I actually don’t believe that we should put a college education in everyone’s hands and think that line of thinking is part of the problem with education in this country.” Sue continues:

“For decades we’ve restructured our elementary and high school systems to become one-size-fits-all and college is quickly going that route too. But the reality is that not everyone fits the mold. Not everyone is cut out for an office job and not everyone is cut out for construction. In some communities, we are now seeing a return to skills training in high schools, where kids can graduate from high school with a two year business degree from the local community college and a cosmetology license, or a mechanics license as well as their high school diploma. These are kids who can go right from high school into the work force with the training they need, start working (or start their own business from their parent’s garage). They won’t be saddled with student loans. The President’s program of encouraging students to go into debt (sorry, but a student loan is a debt) to get an education is backwards – and in the end, not everyone needs a college education to move the country forward, they simply need to be trained to do what they want to do, and preferably, they should learn it in high school.”

Sue has a head on her shoulders for sure.

Who in a debtor’s prison ever earned enough to gain their freedom? More and more student borrowers who are already in a debtor’s prison see the invisible bars, and choose to escape in the only way they know how. They stop paying even a dime. They see their student debt as hopeless. After a few reprieves, a few thousand 8 AM phone calls that wake up mom and dad, several forbearances, with their debt climbing through the roof, they give up and call it quits. For awhile before the end, they believe they are paying for the right to remain out of default, in much the same way they would if the dollars were borrowed from a loan shark. But, when the balance goes up as the checks go out, they finally reach a point where the alternative is a better alternative. They default on their loans. Five million have done this so far.

There are those successful and somewhat lucky graduates who are not suffering from the pain of this huge debt since they have the means or the jobs to pay off their loans. Many are indignant that the others not so lucky should get a small break, and surely not a big break. From the Internet chatter on student loans, many that are doing well do not think that their university peers should even ask taxpayers to help them pay off their loans as it would be unfair to those, such as the fortunate with jobs, who are paying their loans off on time.

This is surely understandable and I would agree that these debts should not be forgiven. But, it would be a good idea for those in default, those about to default, and those who ultimately will have to pay for the default to consider making the debt more able to be paid. Nobody gains a few years after default, when the debt is rendered uncollectible and the once hopeful student’s life is basically ruined for good.

None of us will get in line to give what is not needed to the poor, but most will help as much as we can. From talking to the parents of students in default, I can assure you that no parent, who in good faith sent their children to higher education institutions that promised the world, expected less of a life in return. Nobody expected the world but nobody expected a life of misery after gaining the coveted degree.

At the bottom of the student debt issue today is that colleges and universities oversold their product. The dike is still leaking as they are still able to do this with impunity. So, not learning from their mistakes, they continue to create a never ending line of students heading for the debtors prison who often get no chance at stopping for a brief while just to have a life.

No sane parent, properly advised by a school or a compassionate government, would have encouraged their children to take out huge school loans approaching a hundred thousand dollars after four or five years unless they knew something good was going to happen. In the end, they see their children with a worthless education and a worthless piece of paper to hang on the wall. Now that the results are in, and there are over five million defaults equaling five million ruined lives, what sane parent should consider signing up their children today with the same risk of ruining their lives?

Only the colleges and universities benefit and it is time that they get called on it. It is far better to be unemployed without a huge debt than to be unemployed and be heading to the veritable debtor’s prison until the loan is paid off.

Many parents expected and some still believe that the very act of going to college should result in guaranteed success. The success would include a good job for the graduate and thus there would be a means of paying for the education. Even more importantly, paying off the loan is a side show on the ladder of success, but having the means to buy a home and have a better life—that is the piece d’ resistance!

Today, unfortunately, as parents have found, the verdict is in. Those dreams are not ever going to materialize. Worse than that; those parents who were duped by the admissions counselors in the fancy suits witnessed their children being set up for a life of future miserableness that might just as well be a debtor’s prison. I am afraid it is that bad.

Go to the Internet and type in student loan repayments and you can see the despair and the disappointment expressed by the victims of the student loan charade. If you think the credit card issue with young people is bad, consider that Congress decided that with student loans, your children get no relief at all. Shall we say the loan sharks and their accomplices in the colleges and universities convinced Congress to act in such a way that does not help students who are merely trying to better themselves? I think you can win a bet on that one.

The irony is that colleges and universities are mum about the problem as if they have no culpability at all. These institutions have become in many ways like the bad businesses listed by the Better Business Bureau. Ironically, in recent years, as a recruiting tool, colleges and universities, especially those that operate mostly online, have found a need to register with the Better Business Bureau. Moreover, they use their listing to prove their worthiness to students.

For the Better Business Bureau, legitimate proof of success for a college or university to produce is simply that they actually do bestow degrees. The degree of course is intended to represent the end of a major education process that provides the knowledge for one to be successful in their area of study. When presented in the form of a sheepskin or a rolled piece of paper, for the BBB, that is proof positive that the university is not in a scam business. But, does it really provide the proper proof? Are the universities of today, where 85% of American graduates in 2011 were so inadequately prepared for life that they had to go back home for sustenance, really worthy of being heralded by the Better Business Bureau as bastions of opportunity.

It does not take parents long to determine that the real proof of success, a proof not even asked for by the BBB, is the percentage of students that are employed in their major field. These statistics are dismal. Yet, the colleges and universities continue to be in good standing? Something is wrong in America. .

Let me repeat this please. The vendor that provides the no value education—the college or university—is not held accountable for its failure to produce a functioning product. Of course the finished products are graduates that more often than not nowadays are not at all capable of gaining the promises extended. Yet parents remember when the students were courted by the Admissions Department, and all questions were answered in the positive.

Four or five years prior, these students and their parents were asked to sign letters of intent and even the more important quickie student loan applications to permit them to matriculate. There was no guarantee form within the mass of paperwork, though the guarantee was more than implied.

Worse than that, as if the student loan travesty has never happened, these same charlatans, dressed in their university plumage and finery are permitted each and every year to continue to solicit and encourage a fresh batch of vulnerable 18-year olds to step into the financial abyss of a life that they will never be permitted to begin. And the institutions do so with impunity.

As a former college professor retired last year, I know that many parents and student graduates are questioning the value of their university education today. They have good reason to do so. When the loan brokers have to wait until retirement years to collect the debt from social security or unemployment payments, can we all not admit that something is woefully wrong in America. Why would we encourage more of a bad thing?

The Obama Administration produces no really good jobs for fresh college graduates. Any jobs that are created are given to international student visa holders by the same universities that helped our children underachieve. Should the colleges and universities be able to take credit for job placements when the lucrative fields in which the graduate is placed includes areas of endeavor such as bartenders, waiters/waitresses, truck drivers, or other blue collar type jobs? Do the parents credit the University for these type of job placements, especially for graduate students? I think not.

From what I see from being in the front line, students in the bottom 60% of their class have little prospects for work in their field. Most are wishing they could have that student loan decision they made at 17 or 18 years of age back again for a do-over. What great decisions did you make when you were seventeen or eighteen? Now, you know the extent of the problem. Student borrowers eventually learn that their huge loans, many over $100,000, may very well ruin their lives. For them, before they realize a modicum of success, they find their life has become a veritable debtors’ prison, a dead end for someone the world is ready to call a deadbeat.

Where are the good jobs promised by the universities for all the money borrowed? At the same time that most graduates cannot find jobs, the jobs they do find pay less and less—even if it is in their chosen field. The average salary of college graduates has gone down 10% in the past few years while inflation is growing at an ever faster clip. This is caused by a combination of a poor economy and because foreign graduates holding student visas take American jobs right after graduation.

It helps to offer the starkest statistic of all so all Americans understand this problem is not going away by itself. Eighty-Five percent (not 15%) of college graduates from 2011 have had to swallow their pride and move home with mom and dad because they cannot afford life on their own. It doesn’t take a rocket scientist to call out: “Houston, we have a problem!”

I must admit that I am surprised that nobody is calling out the universities for permitting more and more foreign students into their programs and then helping them gain employment ahead of American students. When foreign students graduate; guess whose jobs they take? According to their student visas, they are supposed to return to their country of origin. Once in America, however, they are not about to leave.

There are many groups that help students on their quest for employment in the US after graduating from an American university. Many students come to America to stay and so they must be employed in order to remain legally in the country. Then again, the illegal residency option is also used when students cannot find jobs in their two-month opportunity period.

International Students taking American jobs is a big problem for American students trying to get a job. Ask the university placement office for the statistics on foreign student placements and for American student placements. Do not let them include the few students who go home in the denominator.

In their senior year, the very same universities and pillaging law firms line up to represent foreign students. They make recommendations for those who want to stay in America and not go home as required by the terms of their student visas—to which they agreed and swore. International students can take any of these four options:

  • Enroll in the Optional Practical Training (OPT) and work in the United States for a year
  • Get an H-1B (high tech work visa) to work at an American organization
  • Attend graduate school in the US while working on gaining employment
  • Simply do not go home and work underground

Whereas we most often refer to these as foreign students; the universities like refer to them as International Students.

How can a foreigner get a job in America after graduation as an International Student? There are a number of answers. Starting from the beginning, a student living in the US with an F-1 or J-1 (student) visa has 60 days to either enroll in another college or university for graduate studies or they can enroll in the OPT program to gain employment.

The OPT program is a very good deal for foreign students but not such a good deal for American students. It permits the J-1 and F-1 student visa status to be extended for one year so that the International student can gain professional training in their area of direct study. The application can take three to four months, so most students are advised early in their senior year to begin the process so that at graduation time, they may continue to stay in the country with employment.

So, after completing all course requirements for the degree, foreign students can gain full-time employment with American companies for one year. During that year, they can work to gain an H-1B visa for the following years. This gives up to six additional years and then they can look to extend the H-1B again or work with their company sponsor to help them gain a green card, which is non-citizen, permanent residency in the US.

Between 2009 and 2010, as less and less Americans students were being hired, the number of OPT students employed in American jobs rose by 14.43 percent.

Overall, if foreign students opt to stay in the US for a longer period of time, they simply get a company to sponsor them for the H-1B non-immigrant visa. This allows them to remain employed at that company for three years, and then they can get that extended for up to six or more years.

So, as the problem for young American student graduates gaining employment comes into focus, we see that a major destination for foreign students is the American workplace by achieving H-1B visas (college graduate – supposedly hi-techs). International students from US university campuses are prime candidates for these positions. So, an innocent college education for a foreign student winds up being a job killer for American students.

It is our Congress that permits this to occur by passing laws that are unfair to American citizens. And so, we find foreign graduates with degrees from the same universities as your children applying for jobs at the same companies that would hire your children if they were willing to work under the same conditions and for the same reduced wages as the foreign students. Once an employer is found, the H-1B visa is granted and the foreign graduate takes the job for typically six years. Meanwhile American students go home simply to survive.

In other words, F-1, and J-1 visa holders are supposed to go home but they find university counselors or lawyers to help get the deck stacked in their favor. They either use the OPT program or they go right to the H-1B visa program so they do not have to go home. Because they do not go home, your children cannot get jobs. Any questions?

The reason corporations hire foreigners over Americans is not because they are superior students but that they are a ready source of cheaper, yet still highly competent labor. Universities not only sell their foreign national graduates to corporations; they also hire more than their fair share of professors from the foreign national community. Many of those hired in universities have just received graduate degrees from American universities. In other words, for financial and diversity reasons, the universities prefer not to hire Americans for the faculty jobs, which they have available.

Congress permits colleges and universities to hire an unlimited number of foreigners as faculty or staff with the H-1B visa program. It is the exception to the nominal 65,000 visas permitted each year. American colleges and universities have a vested interest in foreign students and foreign workers. Ironically, they have no such interest in Americans.

I have witnessed universities firing existing faculty to replace them with younger foreign national professors willing to work for less money. Smaller Universities will even outsource the legal part of the visa work to assure the foreign applicant a six-year H-1B visa. They will contract with immigration law firms and pay up to $10,000 or more per faculty member depending on the complexity of the case for the purpose of hiring a new faculty member who will work cheap for the sake of the university.

Do you think that a “cheap” faculty has any effect on the quality of education our children receive? It is really tough for Americans to get hired in US Universities since our Congress has seen fit to permit an unlimited number of foreign nationals to be hired as professors or staff at universities of all sizes in the US.

With more and more debt saturated former students not being able to survive without their parents, this also has an impact on the indebted jobless student borrower’s ability to ever consider purchasing a home. This is already having a major effect on the housing market and it will continue for years to come. Who will buy the new homes if not the young? How can a college graduate that owes the equivalent of a huge house in student loan debt, ever be considered for purchasing a home? One problem will continue to feed the other until the student debt crisis is solved. Then, homes will again be sold in America at the proper rate.

No solution is simple. With 20 to 30% or more former students ultimately defaulting on their loans, and many more trapped in a financial abyss ( a debtor’s prison more or less), from which they may never escape, Congress can certainly create a better way to help the borrower, the housing market, and the taxpayer, all at the same time. It might not benefit foreigners or the universities but it would help parents and the students that got sucked into promises from university pitchmen that are as powerful as the best infomercials you have ever seen on TV.

What is the Solution?

Short of debtor’s prison, I would suggest that Congress assure that in times when no person in the US can find a savings account earning more than a percent (or two) interest rate; that the student lenders should not be able to inflict usury rates on students. This is common practice today and it leads many student borrowers to default.

Student borrowers need to have their interest rates capped at something that is well out of the usury category. I would like Congress to help me understand why the Stafford Loan interest percentage should be raised to almost 7% when only a rare bank pays more than one percent interest. When today’s borrowers can get a mortgage for just over 4%, and the best savings rate that the most lucrative banks give is less that 1.5%, why would our government ever permit the Stafford loan or any loan for that matter to be so much higher than the savings interest rate. On the Sallie Mae Web Site, they advertise an APR of 9.72% for new student loans. This is ridiculous unless you run a government funded debtor’s prison, or your background is the loan shark business.

Nobody wants defaults on these loans or any other loans but the terms have become so usurious and oppressive that the law of unintended consequences is beginning to deal many defaults right from the top of the deck. This must be solved post haste. As we are all aware, Congress has taken the bankruptcy option off the table for students so for many, there is no way out of the hole. There is not even a speck of light at the end of the tunnel. Is this really what we want or would we fashion a solution that brings back some hope to what is now a situation that makes many of our young citizens hopeless.

After assuring very low, reasonable, payback interest rates, just a hair above the Treasury Bill, I would recommend Congress make the student loan game fair again by rounding in the student borrowers favor rather than the lender. Simply trace back the last few iterations of legislation and instead of making students targets of corrupt lenders, strip those lenders of the powers that the Congress has given them.

Let me offer some examples:

Most of the laws enacted by Congress have hurt those who do not have the means to pay back their student loans at the rate demanded by Sallie Mae or other legitimate “loan sharks” in the student loan industry. For example, Congress enacted the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, which presupposes that students; who are in fact bankrupt, can be enslaved in a debtor’s prison and through prayer, and perhaps some great poker skills, can somehow come up with the money to pay off their student loans.

This gift from Congress had a number of sweet surprises for students, who at the time were looked upon as the bad guys! The big surprise is that Student loans that were not guaranteed by the federal government were henceforth deemed to not be eligible to be discharged in bankruptcy. This became law on October 17, 2005. In other words, when credit card companies find out that you used your credit card to pay for a course, they can come after you under the law. Would any American think that the laws for credit card debt would be less severe than the laws for students trying to gain an American education? What limitations are there on credit card purchases? They can be used for anything. Student loans can be used only for education, so why would Congress treat credit card debt in a more favorable light than student debt.

Additionally, to show its utter disdain for students who cannot get jobs and are forced to default, Congress changed the Higher Education Act and eliminated all statutes of limitations for the collection of student loan debt – even those from the past. So, out of nowhere, students who once had a tough time paying off their loans in times of leniency on student debt, which had passed the time specified in the statute of limitations, and who were thus free from their debt in the 70′s and 80′s, again found themselves getting billed for the forgiven debt. Again their arrearage plus their remaining debt amount became a collectible debt! And we know how nice the collectors are when they call.

Here is another goodie. The law now permits lenders to lie about student loans and it is OK! Yes, Student loans are specifically exempted from coverage under the Truth in Lending Act (TILA). They are also now specifically exempted from state usury laws…lending money at an unreasonably high interest rate. If the student loan sharking agencies raise the rate to 55%, you must pay the rate. Additionally, most student loan guarantors do not have to adhere to the 1988 Federal Trade Commission legislation requiring an adherence to Fair Debt Collection and Practices in pursuing defaulted borrowers. Why not? With over 5 million students in default, and parents more and more involved in the game, how does this help anybody? Are the debt collectors included in the private industry job gains the Administration likes to claim? Can we do with fewer of these types in society?

Please do not get the wrong idea. There were days in which students graduated and then laughed at the idea of paying back their student loans and eventually the loan went away. I am not looking for a return to those days but the pendulum has gone too far the other way and Congress must fix it. People are getting hurt in many ways and I read just today of a young lady with stage 2 curable cancer who was being hounded so much by student loan debt collectors that she took her own life. I am sure there are more situations like this. Is this what we really want for America? Should we punish our young when they are young, and then expect them to grow up to treat the world fairly?

Anybody who checks what the student lenders are doing, and how harshly they treat everybody—people who do not have two nickels to rub together—would admit that somehow a big sin has been perpetrated against the youth in America and our Federal Government permits it. Seventeen and eighteen year olds signing up for a life in a debtor’s prison is a sin just like the children, just over ten years old, working in the mines prompted the child labor laws.

So, let’s solve the problem in a fair way that does not take the life out of the most alive people in America, our children. The recommended solution keeps income flowing to repay the loans and gets the loan sharking, unfair collection tactics, and garnishment of social security out of the student loan business. It is worth a hard look.

The first step is to stop additional student loan abuse. It is not always best for students to go to college. Getting a position as a truck driver, five years after high school, with a college degree and a huge debt does not help anybody but the university. Getting that job five years earlier helps you immensely.

Let’s bring back the Kuder tests to check aptitude in high school and stop the insistence that everybody needs to complete their life by having gone to some college someplace at some time. Unless you can afford the $100,000 and expect nothing in return, stay away from College scene unless again, you are convinced that you will be in the top 25%.

First of all, I recommend giving all the defaulted student borrowers a second chance at making it right. That brings five million lost participants back into the game. If each give just one dollar a year, that is $5 million more dollars than would have arrived otherwise. Everything counts.

Every student borrower with current income should have to pay something back on their loan but it cannot be the equivalent of being in a debtor’s prison. I recommend a progressive payback schedule (like the progressive income tax) based on adjusted gross income.

Up to the poverty line, let’s set the percentage at 1% so everybody pays something. Set the minimum rate of payment in the schedule after the poverty line at 5%. Yes, everybody pays something. I would suggest a bracket for each 5% up to a maximum rate of 25% of income for the highest bracket.

Let’s look at the 2012 tax brackets to get an idea on how to structure this:

Tax Bracket Single

10% Bracket $0 – $8,700

15% Bracket $8,700 – $35,350

25% Bracket $35,350 – $85,650

28% Bracket $85,650 – $178,650

33% Bracket $178,650 – $388,350

35% Bracket Over $388,350

Using the same type of structure, this is a first cut at an equitable minimum payment schedule. Note that everybody who makes as little as $100.00 per year pays 1% (something) up to the poverty level:

Student Loan Repayment Yearly Adjusted Gross

1% Bracket $100 – $11,170 (poverty line)

5% Bracket $11,170 – $20,000

10% Bracket $20,000 – $30,000

15% Bracket $30,000 – $40,000

20% Bracket $40,000 – $50,000

25% Bracket Over $50,000

Of course this all depends on a fair interest rate. If the rate or the process is not fair, then let us change it as the graduated schedule must be fair. It is designed to eventually get the loans paid off but even if it does not, nobody will go broke paying off a debt that is due. So many young people look at say, their Sallie Mae payment, and they know they can’t do it so they don’t, Even if you have a 5% bogie all your life, you can live with that. I can live with that. Overall, most people do pay their loans. If it takes forever, and you can afford it, So what? You are the one that accumulated the debt.

If the country passes the RRR bill and America become prosperous again in many industries, then maybe just once, just once, we can have a small amnesty on student debt. For Pete’s sake we do not want the cream of the crop young people who we permitted to get saddled early with a bad life changing decision assisted by loan sharks, to not be able to wok to make America the best country it can be again.

Of course even with the repayment schedules above, in no instance would anybody have to pay more than the minimum monthly payment in their official payback schedule for their loan even if they could afford it.

I am aware that students, who have been fortunate enough to get great jobs while their classmates have not, are not necessarily happy about taxpayers being involved in a process that lessens their classmates’ burden. This is natural. They think that since they have to pay, everybody has to pay. I agree. This is not a payment amnesty. This plan is merely to keep graduates with loans out of the debtor’s prisons that are the only options promised by the best of the collection agencies operating on behalf of the government.

When somebody becomes a “deadbeat’ in the student loan system; they have few other options than to hide from the collector. Parents change their phone numbers and get unlisted numbers and ask their neighbors to not acknowledge them so they can protect their children. In America, there must be a better way.

So, I would also set up a means for any taxpayer to donate from $1.00 up to any amount of their tax refund and have it directed towards the paying down of all student loans. I would also recommend a web site in which anybody can donate by credit card to help pay down the cumulative student loan debt. Payments would be apportioned to those whose debts are in default.

I do not believe in the free lunch. So, any program must involve the debtor, though they were only 17 or 18 at the time that they originally messed up their lives. The program also should involve the co-signors, who never would have expected the universities to make it more difficult for their graduates to get real jobs. The student debtor and the co-signor were both duped by the academic institutions to keep the student at the institution for four or five years, though the institution was working against the parents promoting foreign students to employers rather than Americans.

We all know that universities make a big promise about the value and the future promise of an education for a successful graduate. Yet, they take no responsibility when the graduate is never employed. Before any reduced opportunity for retirement (garnishment of social security etc.) should be inflicted against the loan cosigners, the cash collectors should come after the universities for promises un-kept. My final recommendation set therefore is a bit more controversial.

All of this money that former students have signed for or have paid and will pay over the years has already gone into the coffers of universities across the nation. Despite being the only party to whom the proceeds have been given, they seemingly have no skin in the loan game. And, since the product of the universities, the students, have not been able to achieve the American Dream as promised by the admissions counselors, and since such universities encourage foreign students to take jobs in the US upon graduation and they also hire foreign faculty even when Americans are available, universities are a part of the problem. In this regard, I would ask the Congress to enact legislation to make colleges and universities a part of the financial solution, providing the following:

1. Collect a fee of 5% of gross revenue to 25% (similar notion to the student payback schedule with different values for gross revenue). This is to be applied to paying down all student loans. The minimum payment would be a factor of the student default rate for the institution and the percentage of gross revenue. The exact formula will need some work.

2. Severely limit the number of foreign students admitted until the unemployment rate is 4% and cap the number permitted to obtain work visas after graduation to a smaller / reasonable number.

3. Limit the number of H-1B visas for faculty to a very small number perhaps 2% of total faculty. Today the number is unlimited and often American students in American universities are shortchanged because their teachers are not fluent in English.

4. Assure the H-1B faculty member on worker visa returns to the home country after 6 years and is not promised additional time. Employee visa holders should not be permitted to get in line for green card or citizenship if they have already been granted faculty status. .

5. Reduce all non University H-1B visas from 85,000 (65,000) to 10,000 until the unemployment rate goes to 4%.

These recommendations do not affect those students who are doing well and can afford to pay off their debt through the normal payment schedules. However, in as much as the Congress is encouraged to remove the ability for financial companies to loan shark any student loan debtor, this plan is designed to help us all. Even the tax payers will be helped as the five million who today have no hope will be able to begin paying at least a small percentage on their loan. Eventually they will be able to pay a higher percentage, and then hopefully, they will also be able to buy a house. The greatest advantage of all in this program is nobody will feel they are in a debtor’s prison with no escape. Amen!

Brian Kelly owns his own IT business consulting practice and is a retired Assistant Professor of Business Information Technology at Marywood University; he is married and resides with his wife of thirty-five years in Northeastern Pennsylvania. Kelly believes that limited government spawns both liberty and freedom, and is running for Senate in Pennsylvania where he has been endorsed by the Independence Hall TEA Party.


About Brian Kelly

Brian Kelly is a business owner and former assistant professor at Marywood University; he and his wife, Pat live in Northeastern Pennsylvania. Kelly ran for COngress and for the US Senate in his state and he believes limited government brings liberty and freedom. Brian's 48th book is titled, Saving America, The How-To Book. It is available at www.checkoutking.com and www.itjungle.com.

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