Investing in Education The Right Way
The Education Bond thinking comes from what I call an Investment Based Economy, or one which puts Wall Street to work for Main street.
In summary, the Education Bond Plan intends: a- to enable Education to be affordable by all; b- bring a lucrative investment vehicle to Wall Street; and c- reduce the Federal Deficit in the area of Education budgets; while d- allowing the Treasury to accrue a liquidity pool of cash –
When we see education as not a cost, but an investment, the associated student debt in my view can be collateralize’d and restructured by the Treasury as tax exempt government issued bonds which can be pegged to the 30 year interest rate where enabling a long term low interest rate student loan that can be affordable.
In other words, student and education purposed loans can be bought by the US Treasury, collateralize’d and sold to the Fed for distribution as education bonds on Wall Street.
This is intended to make education affordable for all while enabling rational repayment schedules that do not overburden people while overcoming the inertia of becoming part of the work force!
This solution also offers a means for a lucrative instrument to be traded on Wall Street, while reducing federal, state and local government exposure to the ‘cost of education’ –
As much as one’s house is an investment that can call for a thirty year mortgage, one’s education can certainly be construed the same.
When structured like the 30 Year mortgage, obtaining a student loan could be more ‘realistically ‘ affordable for more people as opposed to having students default when the payments schedules, fees and interest are not realistically feasible for them.
The same can apply to a School needing funds, or institution of education –
The Treasury I see as the main broker dealer for these bonds. Being a government bond , risk of derivative vapor, or some house of cards, on Wall Street is minimized.
On the market, the Education Bond, if able to be tax exempt, similar to a municipal, could be attractive for both retail and institutional trading.
As much as we once had war bonds, I also question, who would not want to buy an education bond ?
Its also brand new, and it could be viewed as patriotic, as an investment in education is in fact an investment in bettering our nation.
I feel it would be great to hear how Congress is all behind making education affordable, and also to lower the costs of education programs on our federal deficit when bonds for it can be also sold.
The Anatomy of the Education Bond:
The following is an overview of a proforma straw man plan –
Diagram One represents the states of loan request and grant, and the issuing of bonds to the Fed from the Treasury
Diagram two outlines the payment, debit and credit systems –
Diagram One Summary:
A- Student,( or school , and/or institution ) requests a loan from a Loan Broker
B- via Approval the loan is granted to the Student by the Broker who sells the loan to the U.S. Treasury. – The Loan Broker now no longer owns the debt. The Treasury does.
C- The Treasury Collateralize’s the loans into bonds which it issues to the Fed for the Bond Market. ( Loan Brokers can also buy existing loans and then sell them also to the Treasury)
Diagram Two Summary
A- The Student makes periodic payments to the Loan Broker.
B- The Loan Broker deducts a fee and forwards the payment to the Treasury
C- The Treasury retains most of the payment and makes interest rate and redemption payments to the Fed.
In addition to the idea of making education affordable to all, the additional benefits I see are for:
A- The Loan Broker has minimal risk in not having to hold a loan
B- The Treasury’s Associated Cash Liquidity Pool will increase as
a- initially just interest payments are debited, and
b- when redemption payments are due for a bond issuing years later, assumed by then, a robust program will have been underway –
Thanks for reading this and hope you have an interest in helping to make it happen –
Who to Contact about the Education Bond:
These are the Congress people with the responsibility of participating in the Committee on Education and the Workforce. Let them know to start thinking out of the box, and let you get a fair deal –
@repjohnkline @repbobbyscott @RepJoeWilson @USRepRHinojosa @virginiafoxx @RepSusanDavis @Rep_Hunter
@RepRaulGrijalva @DrPhilRoe @CongressmanGT @RepDaveBrat @RepBuddyCarter @RepWalberg @RepMikeBishop
@RepGuthrie @RepGrothman @ToddRokita @RepRussell @RepLouBarletta @RepCurbelo @RepLukeMesser
@RepStefanik @RepJoeHeck @RepRickAllen @RepJoeCourtney @RepMarciaFudge @RepJaredPolis @RepWilson
@RepBonamici @repmarkpocan @RepMarkTakano @RepJeffries @RepKClark @RepAdams @RepDeSaulnier @SpeakerRyan
Wishing you a wonderful opportunity for your Education –
Orion Karl Daley
okdaley@gmail dot com –