Do you think there's a student debt problem? If so, you're not alone. In fact, it's fast becoming an issue… for retirement saving!
It's hard to both pay off loans and save for retirement when you've got the cash flow of a 24 year-old with a Bachelor of Arts in English Literature (or most any other non-STEM related field).
Six years after the depths of the recession, many college grads continue to have a hard time landing their feet on the first rung of their chosen career ladder.
Yet many have found a way to both pay off those pesky loans and save for retirement (for some usual – and unusual ways – to do this, read "Tips on How to Both Save for Retirement and Pay Off Student Loans," FiduciaryNews.com, November 3, 2015).
Is there a way to head this problem off at the pass? Is there a way to reduce student loans?
Some feel college should be free. That sounds nice, but how would professors eat?
Some feel government should pay for college, but those people tend to live in controlled economies and experience a lower standard of living than Americans.
There is one common view, though, and that's this is a really hard problem to solve.
Or is it?
Look, we're all pretty familiar with the financial industry, right?
Why not apply some capitalist know-how towards finding the solution.
Better yet, let's apply the fiduciary standard.
Let's look at aligning incentives and avoiding conflicts-of-interest.
Currently, colleges can maximize the amount of students accepted based on the capacity of pre-existing marginal costs. Not considering university granted scholarships, this action will maximize revenues.
