SAN ANGELO, Texas — Many Americans go through life carrying thousands of dollars in student debt with them. According to the Institute for College Access and Success, the average student leaves their alma mater with $30,000 in debt.
On Dec. 2, Kentucky Senator Rand Paul announced his plan to tackle the accumulating debt with his Helper Act. This bill would allow people to withdraw a max of $5,250 out of their 401K, tax- and penalty-free, to go towards lessening their student loan amount.
Ed Kerestly is the director of financial aid at Angelo State University, and the father of three college-aged children, so he knows the weight of paying for higher education. Kerestly encourages everyone to start saving for those inevitable costs, such as college or retirement, as soon as possible. He said even if it is your child’s senior year, it’s not too late to start saving.
In May 2019, more than 3,000 people participated in a Twitter poll asking how they were planning on paying for college. The poll found more and more families are trying to stick to income and savings, with student loans being the second most popular plan.
Kerestly said the Helper Act would be able to help those who had no other choice, but to take out the loans. He said getting rid of that burden with untaxed money would be a great option for people looking to stop their interest-based loans.
However, many say that this bill would only be useful to a small percentage of the population that has a 401K to utilize. The critics of the bill also warn that taking money from retirement could be dangerous in the long term.