Last week, my wife was flipping through cable channels and stopped on CNBC. I’d say that 999 out of 1000 times, she’d just continue on. However, CNBC was just starting a phone call with Mark Cuban. We are big Shark Tank fans here, so Mr. Cuban gets the clicker stopped.
It’s pretty rare that I disagree with him. On Shark Tank, I sometimes thinks he abandons good ideas and products too quickly, but more often than not, he doesn’t want to work with that entrepreneur due to a personality conflict. To some degree, I can understand it, but if I were him, I’d just be funneling the people I don’t like to qualified associates and still get in the product (assuming it is good).
Today’s topic on CNBC was student debt. Here’s the call with Cuban, so you can play it as you read (I’m going to test your multitasking skills today):
I often don’t write about student debt, because I was blessed enough to get a scholarship. I don’t know all the details and researching those details aren’t of interest to me.
However, what Cuban said struck a cord with me. The 1.2 trillion dollars of student debt held by Americans is amazing. It’s not surprising that if even half of this was put back in the general economy it could do wonders. How many students aren’t able to spend on cars, restaurants, and any of thousands of consumer goods, because they have to instead pay back debt.
It would be one thing if the debt was justified. However, Cuban makes a great point that colleges and universities are building new buildings when they don’t need to. They are paying administrators outrageous salaries. College tuition has far outpaced inflation for years, because it can… they simply saddle the students with more student loans.
Fortunately Cuban also has a pretty good answer. Create a cap of how much students can get in government loans and dial it back over time. As the “easy money” from the students is no longer available, the universities have to get… gasp… frugal and spend the money responsibly. The end result is that the students graduate with less debt and can spend money on housing, cars, clothes, tacos, etc.
I’m sure that colleges and universities are creating jobs with new construction of buildings and such, but I think I’d rather have that money in the students’ hands spreading it through the general economy as a whole.
That’s one of the things that I love about Mark Cuban. In 3 minutes he identified a huge problem with the economy… and he came up with a solution. I’m sure that it isn’t perfect. No one expects to have all the “i”s dotted and “t”s crossed in such a quick phone call.
However, it’s good enough to get started on… if only the people in politics would stop fighting each other and start working towards solutions.