Kamala Harris Tells Parents Of College Students To Take Out A Home Equity Loan So Kids Can 'Do Their Dream Jobs’ Without Going Into Debt
One financial expert is begging people not to do this.
Daniel Hernandez-Salazar / Shutterstock These days, money is at the forefront of most people’s minds. Student loans are a big part of that. Many people are struggling to figure out how to pay for college without going into lifelong debt.
One politician thought she had the solution to this problem, but financial experts warned against it.
Vice President Kamala Harris suggested parents take out home equity loans to help their children pay for college.
At a recent event, United States Vice President Kamala Harris spoke about the importance of home ownership.
According to Harris, “We know that home ownership is probably the most effective way to build intergenerational wealth.”
Harris recommended using that intergenerational wealth to your advantage in a way that may not be immediately obvious.
“As a parent, then as a homeowner, if you have some equity in your home, then you can say to your child, you know, ‘don’t take out the loan,’” she said. “‘I’ll take out some of the equity to help you pay for tuition so that you don’t graduate with extraordinary student loan debt, and so that when you graduate, you can do your dream job.’”
Essentially, Harris suggested that parents give their kids a leg up in the world by being the ones to take out a loan instead. Except theirs would have much higher stakes than just needing to be paid back — it could mean losing their home.
Finance guru George Kamel warned against taking this route.
George Kamel, a financial expert, author, and personality on The Ramsey Show, took issue with Harris’ advice.
“This is a nightmare,” he stated.
“What she’s saying is, ‘Hey, adults, parents, don’t put on your mask,’” he said, referring to the rule that you put your own oxygen mask on in an airplane before helping somebody else with theirs.
“First, go backwards into debt and put your home at risk with a home equity loan, or a home equity line of credit in order to send your kid to college debt-free,” he continued.
Kamel was careful to clarify that the goal is to go to college without needing to take out student loans, or at least not an exorbitant amount.
“Do I want your kid to go to college debt-free?” he asked. “Absolutely. This is not the way to do it. Avoid this at all costs. Put your own mask on first.”
This is far from the first time that the Biden-Harris administration addressed student loan debt.
President Joe Biden and Vice President Kamala Harris have made student debt relief a focus of their administration. This is likely a good thing, since levels of student loan debt have skyrocketed.
According to Lending Tree, “Americans [owe] $1.77 trillion in federal and private student loan debt as of the second quarter of 2023.”
In 2022, Biden announced a plan to “cancel up to $400 billion in student loans,” per the SCOTUS Blog. The Supreme Court struck down the plan in 2023 and said “that the Biden administration overstepped its authority.”
Since then, the president has moved forward with plans to cancel smaller amounts of student loan debt for more specific groups of borrowers.
While the administration may be making student loans a priority, that doesn’t change the fact that, ultimately, this presidential administration, like every other, is made up of individual politicians who live in a very different world than the average American.
To them, it may be no big deal to take out a home equity loan or even to pay off student loans. But these things are what keep Americans up at night. It would be nice to see some understanding of this precarious situation instead of out-of-touch comments.
Mary-Faith Martinez is a writer for YourTango who covers entertainment, news and human interest topics.