Update: President Biden’s Student Forgiveness:
Who’s qualified and for how much:
$10,000.00 for students with no Pell Grants
$20,000.00 for students with Pell Grants
Those making less than $125,000 a year
Today, Pres. Biden has been speaking about his $10,000 student loan debt forgiveness program for some qualified individuals, and my older friends who are Boston condo brokers are upset about it.
Let me start off with, I was fortunate that my parents had the financial means to pay for my education at a private college. Not that it did much good.
Back to why my Boston real estate broker friends are upset. Most if not all, had children that graduated from college and are making over $125,000 a year. They all had to make painful sacrifices in order to pay off their college debt. Because they did the financial prudent actions, they don’t qualify for any student loan forgiveness programs.
No one questions college tuition is high and the fact that it keeps going up every year. However, I think that as long as people are willing to pay, there is no limit to how much colleges will charge. Simple case of supply and demand (I learned that economic theory in college). Once again, as long as young people are willing to borrow money and go into debt the economic cycle will continue. We should be concerned about all the tax dollars colleges are spending and where the money is going. What really bothers me, is the amount of interest these students are being charged. If govt is going to try to help students this where they should start.
At first glance, you might think Boston real estate mortgages and college loans don’t have much in common. But perhaps they should. During the real estate boom, just about anybody was able the obtain a mortgage. Today, the qualifications to purchase a Boston condominium by using a mortgage have tightened up.
So why not start to apply the new adopted mortgage standards to college loans? If your college degree is likely to support repayment of the college loan, such as engineers, finance and the medical profession, it’s worth the investment. But if you’re taking subprime majors — library science, philosophy or real estate blog writing studies — perhaps you should have your parents pay cash. This is not to say, one can’t find a job with subprime degrees. I mean, one could always qualify for a camp coordinator at an old “Occupy Wall Street” site. But you know what I mean.
As I wrote in one of my earlier Boston real estate blog post, I know too many young professionals that are renting Boston apartments because they can’t qualify for a Boston condo mortgage as a result of their college debt. As a Boston condo broker I do see an upside for the student forgiveness program, lets face it, more qualified Boston condo buyers, better for my business.
For my Boston real estate broker friends, if you are feeling upset over some student loan forgiveness, please take a few deep breaths or maybe go for a walk. It is going to be alright – you might even sell more Boston condos because of it.
One last point, who do think is more entitled to debt forgiveness, those with college debt, or those with out of pocket medical bill debt?
Updated: New Survey 59% of Americans think student debt forgiveness will make the inflation crisis worse.
Presently, forty-four million borrowers owe student debt collectively adding up to $1.7 Trillion dollars.
The student loan forgiveness program relating to real estate starts at the 4 minute mark.