Mark Cuban Fights Back Against Student Loan Sharks

Mark Cuban is fighting back against student loan sharks who are drowning thousands of college students, and the economy, in a sea of debt.

Cuban went on CNBC to pitch his plan to tackle the country’s student loan debt crisis, which has now eclipsed $1 trillion. The best way to fix the crisis, he says, is to limit the amount each student is allowed to receive a year to no more than $10,000.

Cuban said that a cap on student loans would force universities to lower tuition cost and curtail spending. Rising tuition cost are putting a strain on an already fragile economy, and lowering tuition costs would improve a student’s purchasing power, Cuban said.

Tuition revenue has become the primary source of revenue at universities across the country, and Cuban equates this revenue source as “easy money,” and that colleges are using the money to embark on spending sprees:

“[It’s] just easy money, and easy money goes to a college administrators’ head just as much as anybody else. Anytime you create easy money, you’re gonna create a bubble or inflation, and that’s what’s happening with college tuition.”

And the bubble is on the verge of bursting.

Debt has become the new black for millenials, as TransUnion, a Chicago-based credit management firm, released a report that shows student loan debt is hampering the ability of 20-somethings to take out additional loans.

How bad is the crisis? Student loan debt is now carried by 36.8 percent of people ages 20-29, a jump from 12.9 percent just a decade ago. To put it in raw numbers, the average student loan balance jumped from $12,442 in 2005, to $29,575 today, and according to a study by Pew Research, even the rich have turned to borrowing for college.

This is the problem that Cuban is trying to find a solution to, as he believes solving the student loan debt crisis among college students will go a long way towards fixing the economy.