The Trump administration appears to be stepping up to do something about the wildly expensive, out-of-control student loan crisis.
The Wall Street Journal reported earlier this month that the administration is employing private consultants who are taking a look at the feasibility of selling all or portions of the government's $1.45 trillion student-loan portfolio to private investors. Five million borrowers who owe $106 billion are in default; and some 43 million people have federal student loans.
Student debt? Gotcha covered – with private generosity
On Sunday, the Class of 2019 at Morehouse College received an unexpected gift when they were told they won't have to pay back their student debts.
A billionaire technology investor stunned the entire graduating class at Morehouse College when he announced at their commencement yesterday that he would pay off their student loans – estimated at up to $40 million.
Robert F. Smith, this year's commencement speaker, made the announcement while addressing nearly 400 graduating seniors of the all-male historically black college in Atlanta. Smith, who is black, is the founder and CEO of Vista Equity Partners, a private equity firm that invests in software, data, and technology-driven companies.
Students at Morehouse graduate with an average debt
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Mary Clare Amselem, a research associate at The Heritage Foundation, thinks the plan is a step in the right direction. It's "admirable," she says, that there's apparently a desire to "get to a place where the administration is on same page that these loans are problematic and that we ought to be turning to the private market a little bit more."
But Amselem admits she's not hopeful that those on the Democratic side of Congress are going to be as willing to tackle the problem.
"Unfortunately, I don't see a lot of talk on the other side of the aisle discussing getting the federal government out of the loan system, which we all know has put us in this situation in the first place," she tells OneNewsNow.
According to the Cato Institute, the amount Americans owe in federal student loans has more than doubled since 2009. The Obama administration's decision to exclude private lenders from making student loans took effect on July 1, 2010.