Why Should Parents Teach Financial Responsibility?

Responsible parents can strengthen their family by teaching their children to be financially responsible. Such parents teach their children to work for their income and to pay their bills. When families are strong, they strengthen their communities, states, and nations.

The Biden administration has tried twice to repay the college loans of certain graduates. However, the judicial system said, not so fast! Madison Marino reported as follows:

“On Monday, two federal court judges issued nationwide injunctions stopping the Biden administration from illegally canceling hundreds of billions of dollars in student debt.” The “latest lawless loan redistribution attempt to fail in court” is “the Saving on a Valuable Education, or SAVE, Plan.”

President Joe Biden finalized SAVE via an administrative regulation less than two weeks after the Supreme Court struck down his initial attempt at mass student loan cancellation through the HEROES Act. There, Biden had unlawfully attempted to cancel up to $10,000 each for borrowers earning less than$125,000 annually, or up to $20,000 if they had ever received a Pell Grant, a federal need-based aid grant, while in college.

SAVE re-imagined the Department of Education’s income-based repayment plans. Under these plans, borrowers would see their monthly loan payment cut in half, from 10% to 5% of their discretionary income. The program also increased the threshold for income that is exempt from the calculation from 150% to 225% of the poverty line. In addition, borrowers could qualify for loan cancellation is as little as 10 years instead of 20 or more, depending on their loan amounts. The plan also waived accrued unpaid interest.

Under the new SAVE Plan, only 22% of undergraduate borrowers were expected to repay their loans, and it was estimated to cost American taxpayers $475 billion over 10 years.

There are further details about the SAVE Plan and why the courts struck it down. They can be found at this site. The important point for this post is that millions of college graduates borrowed money that they pledged to repay.

Parents should teach their children to be honest in their dealings with individuals or organizations. They should not borrow anything that they do not plan to repay. Honesty in business dealings will make families stronger, and strong families strengthen communities, states, and nations.