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L to R: Speaker host Gary Lewis, guest presenter Randy Guttery, and LNR club president Dennis Song Dr. Randy Guttery from the Naveen Jindal School of Management at UT-Dallas made a return visit to the Lewisville Noon Rotary club as the guest speaker last week, addressing the touchy subject of debt in higher education. President Biden has been pushing for major legislative changes concerning what he deems a student loan debt crisis. Among the changes he is suggesting to reduce the financial burden on students, President Biden wants to forgive $10,000 in student loan debt for students who have an adjusted gross income up to $250,000—a proposal that would affect 40 million borrowers. President Biden is citing the Heroes Act as the justification for the legislation, although the criteria for the Heroes Act do not apply, Guttery explained. Moreover, the total cost is estimated at $540 billion to $600 billion—a burden that would shift to regular taxpayers, who would assume approximately $2,000 each. “Don’t in any way think this is loan forgiveness. We’re paying for it,” Guttery said, bluntly. The changes also would significantly shorten the timeframe before student loan debt is forgiven outright, he noted. The average undergraduate debt is about $23,000, but graduate debt for JD and MD degrees can be as high as $250,000, said Guttery. The new legislation, if passed, would reduce the amount of debt owed by doctors, lawyers, MBAs, PhDs, and other high income earning professionals, who Guttery argues are more than capable of paying off their own loans. “No one made these students borrow the money,” he said, adding that thousands of students chose to work their way through college or forgo a college education to earn a living. Moreover, even if everything is forgiven, $300 billion in new loans will be issued within two years. A Bipartisan Issue
Guttery read a quote from Former Speaker of the House Nancy Pelosi, who in July 2021 stated the U.S. president does not have authority to enact debt forgiveness; rather, it requires an act of Congress. Underscoring the danger of the proposed legislation, Guttery cited quotes from other high-ranking democrats in the federal government stating that forgiving student debt to this degree is unprecedented, irresponsible, and lawless. The guest speaker went on to dispel various myths used to try and justify student loan debt forgiveness and said that raising taxes for debt cancellation is “pure lunacy.” Students, parents, and lenders all are to blame for perpetrating the argument that student loans should be forgiven and raising up a generation of students experiencing “premature affluence,” as they use their loan funds for entertainment and other expenditures completely unrelated to college tuition, books, and fees. In addition to placing more stringent requirements on how loan funds are used, said Guttery, lenders should consider limiting borrowing based on a student’s expected earnings, given their major or degree. Guttery also argued students could spend the first two years of higher learning completing state mandated curricula at an inexpensive community college while living at home, then transfer to a more expensive college or university, thereby significantly reducing the cost of higher education. The government is equally culpable in fomenting the current debate, Guttery said, as are the colleges and universities themselves. “Financial aid should be for those who need it,” he noted, adding that financial aid departments at institutes of higher education needed to overhaul their requirements for loan applicants. Many colleges and universities also are pumping millions into expensive sports programs and facilities to maintain their recruiting edge, and passing on the costs to students. “This is a two front problem—students who currently have debt and those who will in the future both need to be addressed,” he said. |
David Seaman last week reminded club members that Lewisville Noon Rotary supports more than two dozen nonprofits in Lewisville and Denton County. The club's 
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