Join David Befort and Paul Fugere on Episode 30 of the Wealth Warehouse!
This week, the guys react to the student loan forgiveness plan that was recently announced by President Biden.
Was this a good idea? Does it address the root cause of the problem? With so much discussion and emotionally-charged debate swirling around this recent development - it can be hard to decipher where to stand on the issue.
In this episode Dave and Paul answer these questions and more. They also share their views on higher education, government meddling, and the intersection between predatory lending and ignorance.
Episode Outline:
(2:15) - Listener question, “Is there a way to capture all subscriptions or charity giving capital prior to giving that money away?”
(6:55) - Start of student loan forgiveness discussion
(12:22) - What is the root cause of tuition inflation?
(14:55) - “Forgiveness” vs. redistribution of wealth
(18:21) - Dave’s story, the trend of government interference in private affairs
(23:34) - “It’s all about the way you think”, discerning the true value of a college degree
(27:24) - “The economics of college are making less and less sense”, using IBC to fund college
(31:58) - “Smart” ways to do college, what is the meaning of college really?
Sources:
https://www.forbes.com/advisor/student-loans/college-tuition-inflation/
https://www.forbes.com/advisor/student-loans/average-salary-college-graduates/
Dave’s Story:
2 men were standing in line at the bank. The first one walked up to the banker:
Man: I’d like to request a mortgage loan to buy a home for me and my family
Banker: Please tell me about yourself
Man: I’m 40 years old. I graduated from a top-tier university 18 years ago with a bachelors degree. I earned my Master’s degree 10 years later. I have an 18 year uninterrupted employment history with references I can share. I have made over $100k in income every year for the last 6 years. I have zero debt to include consumer debt, student loans or mortgage debt. I have 18 years of credit history and my credit score is 800. I have owned and sold 3 primary residences in the last 10 years. 2 years ago I started my own business and am currently self-employed. I have earned a gross revenue of well over $100k in both of the last two years of running my business and I have very low overhead expenses. This year I am on track to gross even more. I can provide all tax records to confirm this. So, may I please get a loan?
Banker: I’m sorry sir, we can’t use your self-employed income to grant you a loan so unfortunately the answer is NO.
The second guy walked up to the same banker:
Man: I’d like to request a student loan for college.
Banker: Please tell me about yourself
Man: I’m 18 years old. I just graduated from high school with extremely average grades. I’ve never had a job and am currently unemployed. I’m not sure what I want to major in or what I want to do when I graduate from college. In fact, I’m not even sure I will finish college but it sounds fun and everyone else is doing it so I’m going to give it a try. I have no credit history and don’t even have a credit score. I’m not even sure what a credit score is to be honest. So, may I please get a loan?
Banker: Absolutely! How’s $100,000 sound? Sign right...
