Our student loan system is a “disgrace,” according to JPMorgan Chase JPM, +0.60% chief executive officer, Jamie Dimon.
Dimon weighed in on student debt in an interview with Yahoo Finance Tuesday. “What we’ve done is a disgrace, and it’s hurting America, we see it hurting household formation, mortgages etcetera,” he said.
Indeed, research indicates that student debt may be preventing young adults from buying homes. There’s also evidence to suggest it’s delaying marriage and other major life choices. Additional research has found that cancelling student debt would provide a boost to the economy by mitigating these challenges.
Still, Dimon stopped short of endorsing some kind of student-debt forgiveness, which has become a hot topic in the Democratic presidential primary.
Senator Elizabeth Warren, a Democrat of Massachusetts, announced a proposal in April to forgive $50,000 in student debt for borrowers earning $100,000 or less. Borrowers earning between $100,000 and $250,000 would be eligible for some debt cancellation, though not the full $50,000, and borrowers earning $250,000 or more wouldn’t have any of their debt cancelled under Warren’s plan.
Senator Bernie Sanders, a Vermont independent seeking the Democratic nomination for president, unveiled a proposal this week to cancel all outstanding student debt. Both candidates, and many others in the field endorse some kind of free public college.
Sanders is proposing to pay for his plan, which will cost a total of $2.2 trillion including making public colleges free, by raising taxes on certain types of investments. Warren’s team estimates the student-debt cancellation portion of her proposal would cost $640 billion. She’s proposing to pay for it by raising taxes on the ultra-wealthy.
When asked by Andy Serwer, the editor in chief of Yahoo Finance whether he supported Sanders’ plan, Dimon responded with some ideas of his own for how to deal with our nation’s $1.5 trillion student debt problem — though with few specifics.
“They should look at all parts of student lending, fix the broken parts, forgive those that need forgiveness and help people get into school and then make sure the schools are responsible in getting the kids out,” he said.
As for how any student-debt fixes would be paid for, “I’ll leave that to the politicians to figure out,” Dimon said.