Part 2: A Blueprint for Repair—How Smart Policy Can Solve America’s Student Debt Crisis
By Eric Lawrence Frazier, MBA
Your trusted advisor in business and wealth
I. From Broken Promises to Bold Solutions 🎓
In Part 1 of this series, I compared the student debt crisis to the 2008 financial meltdown. Both were preventable, rooted in greed, and worsened by systemic failure. But only one group—the banks—got a bailout.
This time, the victims are everyday Americans—millions of them Black, Latino, and working-class—who took out student loans under the promise that education would lead to opportunity. Instead, they were handed a lifetime of debt, shrinking prospects, and the silence of political leadership.
It’s time we stopped managing the crisis and started solving it. 🛠️
II. A Missed Opportunity in 2008—and a Model for 2025 💸
In 2008, the government spent trillions to rescue the financial sector. But what did the American taxpayer receive? No equity, no dividends, no stake in the companies we saved.
Imagine the government taking $5 in company shares for every $1 it loaned to Wall Street. Today, taxpayers would have partial ownership in the banks they saved—and perhaps more faith in the system. The government could have sold that stock and used the gains to pay down the national debt—tax-free, unlike the citizens who funded it.
Let me ask the real question: If they’re using our tax dollars, shouldn’t the taxpayers benefit? How is it that when corporations need help, they get it—no strings attached—but when the people need help, the government acts like a predatory lender?
We need a change in strategy—and a shift in mindset. This is our money, not a personal slush fund for elected officials or corporate insiders. 💼
Now, we have a second chance—not with corporations, but with the people. 🧑🏽🤝🧑🏻
III. The “Earn and Cancel” Model: A Better Way to Repay ✅
Policy Proposal: For every $1 a borrower pays in federal income taxes, they receive $5 in credit toward their student loan balance until fully repaid. And that’s if repayment is even justified in the first place.
This model:
- Applies to both public and private sector jobs
- Includes STEM, healthcare, mental health, education, sustainability, and public service 🧪🩺🧑🏫
- Ties forgiveness to measurable economic contribution, not red tape
This doesn’t just reduce debt—it rewards participation in the economy and reinforces that education is a public good. 📚 Education is already one of America’s most valuable exports. Foreign students come to the U.S. for world-class universities, contributing more than $40 billion to the U.S. economy annually (source: https://www.commerce.gov/news/blog/2023/01/international-students-generated-over-40-billion-us-economy-2022).
Solution: Establish a federal education fund and impose a 200% tuition tariff on foreign students, multinational corporations, and foreign-owned entities operating in the U.S. The revenue could directly fund teacher salaries, school infrastructure, and free college tuition for U.S. citizens. 🏫
Why are we placing tariffs on Chinese-made goods we don’t need while undercharging for our most valuable intellectual export—education?
Tariffs at the state level may face legal challenges due to the Commerce Clause, but the federal government can implement international education tariffs. This fund could bridge the gap as the Department of Education is pushed to the state level.
But let me be clear: devolving education to the states will cause chaos in standards, quality, and funding. States with small populations or low median incomes will struggle to meet demand. And with the federal government pursuing deficit reduction, there’s no guarantee that funding will continue.
The burden will be uneven. The solution must be national.
IV. The Employer Incentive: Help Business Help Workers 🤝
Small businesses employ nearly half of the U.S. workforce. When employees are saddled with student debt, they:
- Delay homebuying 🏠
- Postpone retirement
- Take second jobs instead of building their career
Solution: For every $1 an employer contributes to an employee’s student loan repayment, the employer receives a $5 tax credit.
Together with the “Earn and Cancel” model, this becomes a dual-credit system:
- Employees reduce debt through taxation
- Employers reduce taxes by investing in human capital
This will drive entrepreneurship, wage growth, and retention. 📈
V. Education as Infrastructure 🏗️
We invest in roads, bridges, and airports because they fuel economic growth. So does education.
“The productivity of any company is directly tied to the education and experience of its workforce.”
According to the Brookings Institution, education is the most important factor in national economic competitiveness (source: https://www.brookings.edu/articles/education-is-economic-development/). The World Economic Forum ranks the U.S. #1 in higher education quality but only #13 in affordability (source: https://www.weforum.org/reports/global-competitiveness-report-2020).
Education is not a class issue. It’s a security issue and an economic issue:
- Poverty correlates directly with low educational attainment
- Crime rises when opportunity falls
- The cost of public assistance rises when wages fall
Even Jesus said, “The poor you will always have with you.” This wasn’t an endorsement of poverty but a warning about free will—and society’s role in either enabling or preventing injustice.
We must treat education as an asset, not a liability. It is our most valuable long-term investment. 💡
VI. Explaining the Multiplier Effect 🔁
Some critics may confuse this policy with Reaganomics or trickle-down theory. But this is not supply-side economics. It is opportunity-side economics.
The multiplier effect works like this:
- A dollar not spent on debt service is spent in the economy
- That dollar circulates multiple times—through local businesses, taxes, and wages
- Each turn generates income, employment, and further consumption
According to the Levy Institute, canceling student debt could:
- Add up to $108 billion per year to GDP
- Create over 1.2 million jobs annually 👷🏽♀️👨🏾🔧
- Raise household formation and small business creation rates (source: https://www.levyinstitute.org/pubs/rpr_2_6.pdf)
This is not a handout. It’s a smart investment in future taxpayers, not perpetual dependents. 💼
VII. I Know What You’re Thinking… 🤔
Isn’t this unfair to people who already paid off their loans?
No one denies cancer treatment to a patient because others died without it. Progress doesn’t punish. It protects.
Will this cause inflation?
No. Resuming payments removes money from the economy. Debt cancellation reallocates it to spending, not printing more money.
Isn’t this rewarding bad decisions?
Lenders, policymakers, and for-profit institutions made the bad decisions. Students did what they were told: get educated, work hard, and repay. The system failed them.
Why should taxpayers pay for someone else’s education?
We all benefit from a skilled society: safer neighborhoods, stronger businesses, and lower social costs. Just like we all pay for roads, we may never drive. 🛣️
What about the deficit?
We spent nearly a trillion dollars on defense last year. Education is defense. It defends against poverty, ignorance, and decline. 🛡️
VIII. Closing: A Blueprint for Repair, A Mandate for Action 🧭
Thank you for reading this blog. I appreciate your continued support in raising awareness about the issues that impact our communities the most. Please share this blog—and explore my other articles and videos—each created to educate, empower, and uplift. Together, we can challenge the systems that hold us back and push forward policies that open the doors to opportunity for all. 🚪
Eric Lawrence Frazier, MBA
Your trusted advisor in business and wealth
www.ericfrazier.com | www.thepowerisnow.com
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