‘The Loan Whisperer’: Forgive Student Loans to Stimulate Economy

Savings Will be Poured into Home Purchases and other Big-Ticket Items

December 20, 2020 – Congress should approve the proposed $50,000 in student loan forgiveness per borrower to stimulate the sagging U.S. economy, a veteran home loan processor said Sunday.

Graduates carrying huge student debt are unable to qualify to buy homes, leaving them boxed out of participating in a major segment of the national economy, said Ray “The Loan Whisperer” Rau on the weekly Retail Politics Podcast with Gerry Shields.

“Every time someone buys a house, seven people go to work,” Rau said. “You’ve got carpenters, electricians, you have all the people through the processing of the loans. So, it’s good for the economy to get this very untapped potential.”

President-elect Joe Biden is supporting a U.S. Senate proposal that would wipe out $50,000 in loans per borrower. Senate Republicans want to cap any loan cancellation at $10,000. The average borrower with student loan has $38,000 in debt.

Rau sees an average of two to three inquiries a month from millennials, who fail to qualify for homes because they cannot meet the student Debt to Income threshold, he said. Rau blames many schools and universities for the student debt crisis because they failed to counsel students about what their financial responsibilities would be once they graduated.  

“There needs to be a lot more accountability,” Rau said. “There’s no oversight in a lot of these areas of lending. These schools, they targeted a market and in this case, it was the millennials.”

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Listen to the Retail Politics Podcast with Gerry Shields at: http://www.retailpoliticspodcast or on Apple or Spotify.