Rubio: ‘A Student Loan Is Worse’ Than Indentured Servitude

By Melanie Arter | November 5, 2015 | 12:44 PM EST

Sen. Marco Rubio (R-Fla.) (AP Photo)

(CNSNews.com) - During an appearance at St. Anselm College in Manchester, N.H., on Wednesday, GOP presidential candidate Sen. Marco Rubio (R-Fla.) said taking out a student loan is worse than indentured servitude.

“A student loan is worse. You still owe the money. The difference is if you don’t pay back the investment group, you have a contract, and they can obviously have legal remedies for it. If you don’t pay back your loan, it ruins your credit. They’ll collect on you for the rest of your life,” said Rubio. “Because they’re federally backed, they’ll garnish your wages. They’ll take it out of your tax return if necessary, so I think it’s way better than the issue of whether you want a student loan.”

 



Rubio described his proposal of allowing private investors to loan money to students, who would sign a contract to repay a small percentage of their income for the next 15 or 20 years.

“The student investment plan is an idea that actually allows individuals that instead of going to a student loan route, allows you to go to the equivalent of a private investment group the way you would with a company,” Rubio said.

“You present to them who you are, and what your background is and what your future goals are and your resume and your GPA and your transcripts, and they look at all this, and they decide whether or not they think you are a good investment,” he added.

“If you are a good investment, they pay for your tuition. This is primarily at the graduate level - and in return, you sign a contract to pay back a percentage of your income - one or two percent a year for 20 years or 15 years,” Rubio said.



A panelist at the event asked, “So the student investment plan was a new idea I had not heard of when I was preparing for today. Everybody I shared this with had the same question I want to pose to you: What’s the difference between indentured servitude? This is what comes front in mind when I hear something about 10 years of my life being paid over to another person.”

“A student loan is worse. You still owe the money,” Rubio said. ”The difference is if you don’t pay back the investment group, you have a contract, and they can obviously have legal remedies for it.

“If you don’t pay back your loan, it ruins your credit. They’ll collect on you for the rest of your life,” said Rubio. “Because they’re federally backed, they’ll garnish your wages. They’ll take it out of your tax return if necessary, so I think it’s way better than the issue of whether you want a student loan,” he added.

“On the student investment plan, the risk is on the investment group. If you don’t make enough money to pay them back in that defined period of time, they made a bad investment. In the student loan, if you borrowed $100,000, you owe $100,000, and you will owe that $100,000 until the day you die or pay it off,” said Rubio.

“If you just don’t make enough money to pay back the student investment group, they made a bad investment. They assume that risk. There’s a big difference, and by the way, it’s optional. It’s not mandatory. We’re not telling anybody they have to pursue this route, but it is way better than owing a student loan, which ... you will owe that amount of money whether you’ve found a job or not,” he said.

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