Frugaling

Save more, live well, give generously

  • Home
  • Start Here
  • Popular
    • Archives
  • Recommended
  • Contact
  • Save Money
    • Lifestyle Downgrade
    • Save Money with Mindfulness
    • Save at Starbucks
    • Psychological Trick To Reduce Your Online Shopping
    • Best Freebies
  • Minimalism
    • 8 TED Talks To Become A Minimalist
    • We Rent This Life
    • Everything Must Go
    • Lifestyle Downgrade
    • The Purchase Paradox: Wanting, Until You Own It
    • Nothing In My Pockets
  • Social Justice
    • Destroy The 40-Hour Workweek
    • Too Poor To Protest: Income Inequality
    • The New Rich: How $250k A Year Became Middle Class
    • Hunter Gatherers vs. 21st Century Desk-sitters
  • Make Money
    • Make $10k in 10 Months
    • Monetize Your Blog
    • Side Hustle for Serious Cash
  • Loans
    • 5 Rules To Follow Before Accepting Student Loans
    • Would You Marry Me?
    • Should I Have a Credit Card If I’m In Debt?
    • $50k in Scholarships in 70 Minutes

Mark Cuban’s Horrific Student Loan Debt “Solution”

By Frugaling 15 Comments

Share This:

The stock market’s been horrific. Volatility has been at record levels. Stocks are at 6, 7, and 8-month lows. The losses prompted me to stay glued to CNBC. Every morning this week, I woke one hour earlier and listened — rapt to the dancing futures and opening moments. Then, I’d be off to work, school, etc.

But this article isn’t about stock market woes. Instead, I want to focus on a CNBC guest and favorite, Mark Cuban. Cuban is an entrepreneur and billionaire (about $2.6 billion). He’s an owner of the Dallas Mavericks and serially invests in startups, businesses, and other money-making ventures. This week, he decided to speak out against the rising tide of student loan debt — something we can all agree is crushing our future economic potential.

At first, I welled with excitement and thought, “Finally, someone is going to start critiquing our financial destruction via student loans and provide sensible solutions to the $1.2 trillion debt.” Cuban exclaimed that we couldn’t continue this and that we were hurting the entire economy with this burden. But after complaining about the problem at length, he provided no solutions.

The CNBC anchors recognized this and asked him to elaborate on his answer. And that’s when I nearly soiled my pants. His big fix to this growing problem was to — ugh, it’s hard to write this — cap the federal governments tuition aid to students. More specifically, he proffered that students shouldn’t receive any more than $10,000 each year in aid.

The billionaire entrepreneur, successful businessman, and all-around sports guy said that a cap like this would force schools to reduce tuition and fees. This is when I began screaming at the TV with a rebuttal, desperate to be heard by the conservative messengers on CNBC. That didn’t work, so I took to my keyboard to muddle a rebuttal.

Unfortunately, there’s a growing movement among “experts,” pundits, and pretenders that solving the student loan crisis is as simple as cutting funding opportunities. Cut the funding and institutions will be forced to lower their costs. Economically speaking, they’re partially right. When you reduce the funding opportunities, this manipulates the “free market” for education.

With the “Cuban Plan,” the idealistic message is: cut aid funding and watch the tuition/fees crumble. With a $10,000 cap on tuition, Cuban expects institutions to follow in line. But that’s not what will happen. The reality is that the market for private loans and corporate, profit-hungry, debt-ballooning machines will take its place. Suddenly a controlled market of lenders by the federal government will be swamped and stalked by private lenders — only out to massage another percentage point (or more) out of desperate students who are eager to get educated and attempt to better themselves.

Many will be priced out of an education. The bloated budgets of higher education institutions won’t be able to simply adapt. Universities have been spending astronomical amounts on recreational centers, educational facilities, and residence halls (aka: dorms). While frivolous, the tuition and student fees are established. If they were to be reduced or cut due to federal aid money, schools may default on hefty loans to pay for these extravagances.

Cuban’s idea is a lose-lose. Schools will default, close, and/or fire massive amounts of educators. Students will be stuck with private loans to pay the gap, or be forced to relinquish their dreams of a higher education (and the future earnings potential). The only winner will be Cuban and his cronies — the 1 percent.

See, the rich will benefit because it’ll be another federal program that’s axed. And anything federal, governmental, or communally good is inherently bad among rapacious 1 percenters. Moreover, private funders such as Chase, Wells Fargo, and Bank of America will be able to roll up their sleeves, sell some toxic loans, and collect for decades. Those holding stock in those companies could escalate their wealth — all off the backs of low income and desperate students.

What we need is government reform. What we need is debt forgiveness. What we need is a growing mass of people that believe in future generations and their education. What we need is a long view — not the myopic, shortsighted one that Cuban propagated.

He’s right about one thing: there’s a crisis brewing and we need to change our relationship with student loan debt immediately. Tuition and fees need to be cut. For-profit universities should be unable to receive federal funding whatsoever. Taxation to support higher education of public institutions needs to increase dramatically. Be it from estate taxes or net worth taxes or capital gains taxes, somebody’s got to pay for it. And we can’t keep giving the bill to future generations.

These are the people that will take care of you when you are aging. These are the people that will discover the cure to cancers. These are the people that will reduce climate change. These are the people that will pioneer ever greater technologies.

It’s time to support them and ourselves.

Filed Under: Save Money, Social Justice Tagged With: college, debt, federal aid, Fees, Mark Cuban, Student Loans, tax, taxes, Tuition, universities

Follow

  • Facebook
  • Google+
  • Pinterest
  • RSS
  • Twitter

Subscribe

Best Of

  • The New Rich: How $250k A Year Became Middle Class
    The New Rich: How $250k A Year Became Middle Class
  • 5 Tricks To Save Money At Starbucks (Updated)
    5 Tricks To Save Money At Starbucks (Updated)
  • Destroy The 40-Hour Workweek
    Destroy The 40-Hour Workweek
  • The Real Reason Poor People Can’t Save
    The Real Reason Poor People Can’t Save
  • My Low-Income Lifestyle
    My Low-Income Lifestyle
  • Was Albert Einstein A Minimalist?
    Was Albert Einstein A Minimalist?

Recent Posts

  • How To Find A Reliable Service Provider For Currency Exchange
  • First-Time Landlord: Know Your Rights to Protect Yourself from Bad Tenants
  • Increase Your Revenue Simply by Being a Great Manager
  • How to Earn Extra Income During the Lockdown
  • 4 Ways That Residential Replacement Windows Will Help

Search

Archives

  • January 2021 (2)
  • December 2020 (2)
  • October 2020 (2)
  • September 2020 (1)
  • August 2020 (3)
  • June 2020 (1)
  • May 2020 (2)
  • April 2020 (1)
  • February 2020 (2)
  • January 2020 (1)
  • December 2019 (1)
  • November 2019 (5)
  • September 2019 (4)
  • August 2019 (1)
  • June 2019 (1)
  • May 2019 (1)
  • April 2019 (1)
  • March 2019 (3)
  • February 2019 (1)
  • January 2019 (3)
  • December 2018 (1)
  • September 2018 (2)
  • July 2018 (1)
  • June 2018 (2)
  • May 2018 (1)
  • April 2018 (5)
  • March 2018 (6)
  • February 2018 (4)
  • January 2018 (1)
  • December 2017 (10)
  • November 2017 (3)
  • July 2017 (2)
  • June 2017 (5)
  • May 2017 (2)
  • April 2017 (8)
  • March 2017 (4)
  • February 2017 (3)
  • January 2017 (2)
  • December 2016 (2)
  • November 2016 (4)
  • October 2016 (2)
  • September 2016 (1)
  • August 2016 (4)
  • July 2016 (1)
  • June 2016 (3)
  • May 2016 (3)
  • April 2016 (4)
  • March 2016 (5)
  • February 2016 (2)
  • January 2016 (2)
  • December 2015 (3)
  • November 2015 (5)
  • October 2015 (5)
  • September 2015 (4)
  • August 2015 (6)
  • July 2015 (8)
  • June 2015 (6)
  • May 2015 (14)
  • April 2015 (14)
  • March 2015 (13)
  • February 2015 (12)
  • January 2015 (15)
  • December 2014 (10)
  • November 2014 (5)
  • October 2014 (6)
  • September 2014 (7)
  • August 2014 (12)
  • July 2014 (11)
  • June 2014 (12)
  • May 2014 (16)
  • April 2014 (13)
  • March 2014 (13)
  • February 2014 (9)
  • January 2014 (20)
  • December 2013 (9)
  • November 2013 (18)
  • October 2013 (15)
  • September 2013 (11)
  • August 2013 (11)
  • July 2013 (27)
  • June 2013 (18)
  • May 2013 (16)

Best Of

  • The New Rich: How $250k A Year Became Middle Class
  • 5 Tricks To Save Money At Starbucks (Updated)
  • Destroy The 40-Hour Workweek

Recent Posts

  • How To Find A Reliable Service Provider For Currency Exchange
  • First-Time Landlord: Know Your Rights to Protect Yourself from Bad Tenants
  • Increase Your Revenue Simply by Being a Great Manager

Follow

  • Facebook
  • Google+
  • RSS
  • Twitter

Copyright © 2021 · Modern Studio Pro Theme on Genesis Framework · WordPress · Log in