Democratic presidential candidate Elizabeth Warren is on a mission to tackle student loans and create a student debt forgiveness plan that will be funded by the taxing of the wealthy.
The student debt crisis has reached an astounding $1.6 trillion. More and more people are going to college and signing their lives away by accumulating debt that is becoming nearly impossible to pay off.
The national unemployment rate may be down at 3.7%, but the type of jobs available and their pay rates are not equivocal to the cost of obtaining a degree to acquire those positions.
In today’s society, a bachelor’s degree is equivalent to a high school diploma. This makes the market highly competitive and also encourages students to acquire more debt by seeking an even higher education in graduate school.
The end result, students are finding it difficult to adjust to life after college. Purchasing homes and starting families are now competing with daily expenses necessary to survive, such as food, utilities and transportation.
Warren went on Twitter to address billionaire Leon Cooperman who is also a stakeholder in the largest student loan financier, Navient, and also hedge fund manager, chairman and CEO of Omega Advisors.
“One thing I know he cares about – his fortune,” Warren posted on Twitter. “He’s a shareholder in Navient, a student loan company that has cheated borrowers and used abusive, misleading tactics. He even went so far as to ask how I might impact his investment in the last earnings call with Navient.”
Warren intends to impose a 2% tax on wealth that exceeds $50 million. For those who have wealth over $1 billion, they will not only see a 2% tax, but also an additional 6% tax.
The senior senator of Massachusetts continued on Twitter, “I care about an entire generation of students being crushed by student loan debt – deferring their American dream because they can’t afford it. I care about making sure every American has the opportunity to succeed. I’m not afraid to stand up to the wealthy and well-connected.”
Cooperman argued that Warren was vilifying the wealthy and misleading Americans by promising “free stuff.”
Last year, an investigation by the U.S. Department of Education found that Navient was using predatory and deceptive practices. Many states have retaliated against the company by filing lawsuits for misleading borrowers.
The second largest student loan company, Sallie Mae, was also exposed for excessively spending on employees by funding luxury trips and giving out bonuses for reaching sales goals.
In October, news broke that Sallie Mae had funded an all-inclusive luxury trip for 100 employees and their families to go to a Hawaii resort. What was the occasion? The employees were celebrating a record year in student loan “sales”, signing 374,000 borrowers to $5 billion in debt.
Meanwhile, the nation is bubbling with freshly graduated students that are highly educated, but sorely broke.
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