EDITORS' CORNER
OPINION: Two recent callers into the ‘Ramsey Show’ illustrates the problem with student loan bailouts
A woman making $220,000 per year apparently qualifies for a taxpayer-subsidized bailout of her student loans.
Recently, the “Ramsey Show,” part of financial guru Dave Ramsey’s network, took several calls from well-paid workers who either were receiving a bailout of their student loans or were trying to obtain one. The two calls illustrate the problems with requiring taxpayers to pay for other people’s loans, especially those with high-income earning potential.
On May 1, a Gen Z woman named Hayley shared how she was hoping to get on the Public Service Loan Forgiveness plan. This allows government workers and nonprofit employees to have their student loans wiped away after 10 years of making payments.
She is currently making “220ish a year” and has “90k in student debt.” But she is currently on the “SAVE program” so her loans are in “deferment.”
While hardworking taxpayers are being asked to fork over money to bail out Hayley, she is able to put away 50,000 per year into retirement the past several years.
After telling her to pay off her loans, co-host John Delony jumped in with further commentary. Delony, a former college administrator, laid out the problems with the bailout program.
“Me, I got two kids…You make $220,000 bucks,” Delony told the 30-year-old caller.
“You have the ability to repay these student loans that you signed your name on,” he said. “And you’re choosing not to so that me and my wife, as part of our taxes, are going to pay them for you,” he said.
Delony said he wouldn’t have a problem if she was using the program as intended, i.e. for a low-paid prosecutor working to protect poor people.
“You signed your name to a piece of paper, you’re making almost a quarter million dollars a year, pay the debts you said you were going to pay back,” he said, before encouraging her to move forward with paying off debt and then building wealth.
Several days later, another woman called in asking how she could get a taxpayer-funded bailout for her medical school loans (she is projected to make $300,000 per year after residency).
The woman, named Stephanie, wanted to make “minimum” payments to get on the public service program.
Her plan was to work six years at a hospital as part of residency and then stay four more years to qualify for the bailout.
She shared that she is engaged and her and her fiancé want to know if they should pay off the debt or put aside money to buy a house.
The hosts of course encouraged her too not to mess around with the student loan bailout game.
The media has tried, desperately, to find a “sympathetic” student loan victim, as The Fix has previously reported.
And yet, the search continues.
MORE: University of Kansas creates own law school loan program
