Tough Guy, senator Mitch McConnell making political hay over President Joe Biden extending a student loan moratorium for a few more months. The mistake Joe is making or has made is not deciding what to do. It is getting late in the game of politics.
Here is senator Mitch McConnell.
“I think in this country, it’s important to remind people that we ought to pay our debts,” McConnell opined. “We all pay our debts. And with regard to extending the moratorium, quoting Larry Summers again, he said it’s exactly the wrong thing to do in the middle of this over-heated economy producing this rampant inflation.”
You already know my thoughts on why inflation is so high. Lets take a moment and review who Mitch McConnell and “Dana Perino” are referring to on repaying student loans. Dana did mention we are still in the midst of a Covid pandemic.
Mitch is not noticing, the largest amount of debt per person is with people 40 years and older.
It is not the youngsters . . .
Literally, the people having these loans have been penalized by a system which has no relief on a loan similar to what a new pickup truck costs in 2020 or $39,000. In many cases of bankruptcy, you have a chance to keep your vehicle and lose your debt. If late on a payment old GMAC would hit you with a late fee of $30. The car payment did not double and neither did the loan balance. Most have tried to pay back the original loan amounts.
Let me break this down a little further.
Slightly more than half of the student loan holders who are 35 years old or older, hold 62% of the total loan debt. Greater than half of that debt is the result of penalties, interest on penalties, consolidation fees, and other fees.
Lets, take this a step further and look at older versus younger borrowers. The total dollar amount is $489.3 million. Fifty-four percent of the borrows are 50 years or older and are holding 78% of the total amount. This again is well beyond the original principal and includes everything I mentioned above inflating the total.
A more complete picture can be seen below. I had updated Alan Collinge’s of Student Loan Justice Org. data. There are fewer young people than older people holding debt. The likelihood of collecting the 1+ trillion dollars are slim. The penalties being exacted on this population hurt their productivity to contribute more to the economy.
This is more of Republicans turning up the heat for an election. Mitch McConnell and Republicans could care less about student loan debt or having an educated constituency.