steven fiorillo
Thursday Night Stocks with Amit and Steve
11/6/2025, 9:09:30 PM
Economic Summary
- Many students take on large amounts of federal student debt despite limited lifetime use of specialized coursework; this can constrain labor mobility, delay homeownership, and reduce retirement savings.
- Proposal: impose a lifetime cap on federally subsidized student loans (example: $50,000 for 2026 entrants) and index the cap to inflation. This would lower borrower exposure and could force colleges to align tuition/pricing with demonstrated value.
- Allowing loans above the cap to be dischargeable in bankruptcy would shift risk away from the federal government, potentially reducing long-term fiscal exposure but increasing outcomes uncertainty for private lenders.
- Improving mandatory financial literacy in high school (credit cards, debt, compound interest, retirement savings) would raise individual financial resilience and reduce future reliance on government-subsidized borrowing.
Bullish
- Lifetime cap reduces borrower exposure to unmanageable debt.
- Making excess loans dischargeable incentivizes responsible lending and borrowing.
- Indexing caps to inflation preserves real value over time.
- Teaching financial literacy improves long-term household financial outcomes.
Bearish
- Unchecked student loan subsidies encourage excessive borrowing and rising tuition.
- Lack of financial literacy leaves many adults with poor credit and retirement savings.
- Non-dischargeable debt traps borrowers and limits life choices.