Total Student Loan Debt: $1.56 trillion
Total U.S. Borrowers With Student Loan Debt: 44.7 million
Average Student Loan Debt: $32,731
Average Student Loan Payment: $393
(Source: As of 3Q 2019, Federal Reserve & New York Federal Reserve)
How to solve this:
Step 1: Issue $1.5 trillion in 30 year treasury bonds at 1.75% (as 3/19)
Step 2: Refinance all debt at 2.5% over 29 years & delay current payments
- US government earns 0.75% spread = $11.250 B
- Students: no payments for one year (until 4/1/2021)
- Students: Avg Monthly Payment would decline: from $393 to $135
- Economic Benefits: Annual Payments decline from approximately
- $210 billion to $70 billion (this decline of $140 billion annually would continue to stimulate the economy for the next 30 years)
Any opinions are those of John Vance and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice.
This is a hypothetical example for illustration purposes only. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct.
Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Vance Wealth is not a registered broker/dealer and is independent of Raymond James Financial Services