Privatized Banking Solves the Student Loan Crisis

Make no mistake, student loans are the new indentured servitude (aka “slavery”).  Like an IRS bill, there is no escaping a student loan via bankruptcy. Perhaps in response to this reality, millennial parents are making bad decisions. A recent survey indicates that more are feeling the need to finance their children’s’ education by NOT saving for retirement. This is a tragic mistake.

An education is an investment like any other. What income will be secured by the degree? Is there a real requirement for a degree?  Does it have to be gotten from a university? Full-time or par- time? Let’s not forget the 400%+ needless inflation of college costs since the 1980’s.

The capital used for any educational expense must be assessed for opportunity cost, and obtained with time-appropriate leverage. I’ll explain later.

Let’s go back to the top.  Are your children willing to finance your retirement? Who can make such a promise, even if they truly planned and wanted to keep it?  This is another terrible burden.  Sure, in early times (and maybe the future) this meant that a multi-generational family lived in the same house.  That was retirement.  Not telling you what to prefer, but most of us would hope to do more than sit in a rocking chair.

If we do not take control of our retirement, there is literally no time to correct for a mistake.  An education that supports a lifetime of income can and should be financed.

Here is our Privatized Banking option:  We build our bank, starting as soon as possible.  All excess income and savings go there.  We lend our children the money from our bank.  They pay us back when it makes sense–when their income rises to the correct level. This is correctly matching the time that the education needs to start paying back (“time-appropriate leverage”).  They pay us back more easily and flexibly if times are tough.  The banks demand their money very soon and without interruption, even with the usual deferments.

We retire with our own bank’s money as income.

We have a better answer.