Billionaires aren’t much like the average American. Case in point: They probably haven’t struggled with student loans — or have long since repaid them.
But some famous billionaires still have plenty of thoughts to share on the topic. See whether billionaires think a college education and student loans are worth the costs. Even better, see the alternatives they think are smarter solutions to student debt (like becoming a plumber).
1. Donald Trump: make student loans affordable again
A billionaire real estate titan and now President of the United States, Donald Trump spoke up about student loans throughout his 2016 presidential campaign. He recognized that many student loan borrowers are struggling with large debt balances and high monthly payments.
“Students should not be asked to pay more on the debt than they can afford,” President Trump said during his campaign. “And the debt should not be an albatross around their necks for the rest of their lives.”
President Trump set out a student loan policy plan in his campaign that would limit monthly payments to 12.5 percent of income and forgiveness after 15 years. Many borrowers like those policies — but aren’t optimistic about what the Trump administration means for student loans.
2. Bill Gates: college is a “surer path to success”
Bill Gates is the billionaire known equally for founding Microsoft and for his impressive philanthropic work. In a blog post, Gates calls a college degree a “surer path to success” than his own history of dropping out and founding a billion-dollar business.
In fact, during a Reddit AMA, user anonymouslives asked: “What is your best personal financial advice for people who make under $100,000 a year?” Gates’ response: “Invest in your education.”
But Gates recognizes that the promise of post-college success falls short for students who leave before earning a degree. Among those who drop out, “All leave school with a lot of debt and, even worse, a diminished sense of themselves,” he wrote on his blog. “Their entire sense of what they can achieve in life is damaged.”
His charity, the Bill and Melinda Gates Foundation, has initiatives targeting this issue. The foundation supports innovations and programs that prepare high school students for success in college, and increase college completion rates for low-income students.
3. Mark Cuban: cap what students can borrow
Mark Cuban, the billionaire owner of the Dallas Mavericks and star of TV hit “Shark Tank,” has said a lot about student loans over the years.
In 2012, he published a blog post that outlined student debts as a crisis verging on meltdown. “Its [sic] far too easy to borrow money for college,” he wrote. “Which is exactly why [schools] have no problems raising costs for tuition each and every year.”
Cuban told Business Insider in 2015 that there should be legal caps on how much students can borrower through private lenders. “At some point, there’s got to be legislation where we put a limit on how much you can take out on a loan,” he said. He’s even suggested in the past that federal student loans be limited to $10,000 a year per student.
4. Warren Buffett: invest in yourself — in college or not
Billionaire Warren Buffett built his company Berkshire Hathaway into one of the most respected and valuable investing firms in the nation. As an expert on investing, Buffett has said that the most important investments people make are in themselves.
“The best education you can get is investing in yourself,” Buffett told a group of MBA students at the Richard Ivey School of Business in 2012. “But this doesn’t always mean college or university.” According to Buffett, one of his most valuable learning experiences was Dale Carnegie’s public speaking course. It cost him just $100.
“You should always ask yourself, ‘does this have any value to me?’” Buffett says, adding that he went to university in large part because of his parents’ expectations.
5. Michael Bloomberg: have you considered plumbing?
Michael Bloomberg, CEO and founder of media company Bloomberg LP, served as New York City mayor from 2002 to 2014.
In a 2014 meeting with a group of Wall Street traders, Bloomberg said he thought pursuing a career in plumbing was as good a bet as college. “Today if your kid wants to go to college or become a plumber, you’ve got to think long and hard,” Bloomberg said.
“If he’s not going to go to a great school and he’s not super smart academically, but is smart in terms of dealing with people and that sort of thing, being a plumber is a great job because you have pricing power, you have an enormous skill set,” he added.
6. J.K. Rowling: tuition should be paid by governments
J.K Rowling is the rumored-billionaire author of the “Harry Potter” series. In the book, witches- and wizards-in-training attend Hogwarts, which by one estimate from Mic, would cost $43,000 annually to attend, including tuition, robes, wand, and other magical school supplies.
The wizarding families are seen buying supplies for their children in the series (which amounts to $1,031, according to Mic). But J.K. Rowling clarified in a tweet that Hogwarts is tuition-free.
Rowling states that tuition for Hogwarts and other “magical education” is covered by the Ministry of Magic — the government in the world of Harry Potter. She also implied that non-wizards ought to adopt the same system, with governments fully covering the costs of higher education.
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.23% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
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Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
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4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
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Citizens Bank Disclosures
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