Kentucky Senator Rand Paul wants to tackle the student debt crisis by letting college students tap into their retirement accounts in order to pay for school or pay off loans.
The Kentucky Republicans is pushing federal legislation —S.2962, the Higher Education Loan Payment and Enhanced Retirement (HELPER) Act — which will allow individuals to take up to $5,250 from their 401(k) or IRA annually to pay for college or at least pay down their student loan debt without having to pay taxes or related penalties.
Additionally, parents or spouses can take money from retirement accounts to help out.
As of now, Americans owe about $1.5 trillion in student loans.
Paul views this bill as a positive step in addressing the very imminent student loan crisis that millions of Americans are facing. He is of the opinion that Republicans must offer an alternative to student debt forgiveness and “free” university programs being offered by leftist 2020 presidential hopefuls such as Bernie Sanders and Elizabeth Warren.
Paul stated, “Instead of empowering the federal government to increase its involvement in education, which will only raise costs even higher and further lower the value of our dollars to cover them, we can empower the American people to reduce the burden of debt, realize the dreams they studied hard to achieve, and grow their retirement savings.”
As student debt continues to mount, higher education will become a hotter issue.
Contrary to popular narratives, the current higher education crisis is the result of government policies that subsidize an excessive amount of student loans. Many students with dubious skills and low ceilings for earning potential receive loans they likely won’t be able to pay off.
However, there are many students who are in college for the right reasons that must still endure the artificially high tuitions rates that are brought about by the increasingly cartelized higher education sector and subsidized student loans.
Paul’s measure is a breath of fresh air in a time when the only major student loan proposals being put forward involve massive increases in the size of government.