A Proposal to Slash Student Debt Costs, Reward Excellence, and Streamline Federal Losses
To: President Donald Trump and Elon Musk
Date: February 23, 2025
From: A concerned parent and 2 glorious hours with GROK3
Gentlemen,
The student loan system is a bloated mess—$1.7 trillion in debt, with kids paying 9% compounding interest that doubles their burden over time. DOGEIE (Department of Government Efficiency in Education) proposes a fix: convert loans to 4.5% simple interest, add a 0.5% deduction (to 4.0%) for GPA ≥ 3.5, and save borrowers billions while trimming fat from the federal ledger. For a $160,000 loan over 15 years, this cuts student costs by $67,586—or $74,630 for top performers—while costing the government $67.59 billion to $69.63 billion per million borrowers. It’s a win for students, a merit-based boost, and a manageable trade-off if we rethink revenue. We’re close to changing the world—let’s make education debt efficient, not oppressive.
Take a kid borrowing $40,000/year for four years—$160,000 total, a typical tab for a decent degree. At 9% compounding interest over 15 years, they’re stuck paying $1,622.79/month, totaling $292,102.20. That’s $132,102.20 in interest—83% of the principal—thanks to monthly compounding piling on like a bad SpaceX launch delay. The government rakes in that interest, but it’s crushing graduates, killing their shot at the American Dream, and clogging economic gears. We can do better.
DOGEIE reboots this:
- Base Plan: Switch to 4.5% simple interest (amortized for practicality). Monthly payment drops to $1,247.69, total paid is $224,584.20, and interest falls to $64,584.20.
- Incentive: Knock it down to 4.0% for students with a GPA of 3.5+. Payment becomes $1,207.35, total paid is $217,471.80, and interest is just $57,471.80.
Student Savings:
- 4.5%: $67,586 per borrower ($375.47/month).
- 4.0% (top 30%): $74,630 ($414.61/month)—an extra $7,044 for excellence.
Government Impact:
- 4.5% for all: $67.59 billion loss per million borrowers.
- 4.5% + 4.0% (30% qualify): $69.63 billion loss.
This slashes interest by 51% (4.5%) or 56% (4.0%), freeing up cash for Tesla leases or 401(k)s instead of endless debt cycles.
- Current (9% Compounding): $160,000 loan, 15 yrs, $1,622.79/month, $132,102.20 interest.
- DOGEIE Base (4.5%): $1,247.69/month, $64,584.20 interest, saves $67,586.
- DOGEIE Incentive (4.0%): $1,207.35/month, $57,471.80 interest, saves $74,630.
- Scale: 1 million borrowers = $67.59B base loss, $69.63B with incentive.
That’s $2.04 billion extra for the merit bonus—chump change if we cut waste elsewhere (looking at you, bloated bureaucracies).
- For Students: $67K–$74K savings per head means less default, more spending, and a stronger economy. The 4.0% carrot incentivizes A’s, not just diplomas—merit over mediocrity.
- For Government: Yes, we lose $67B–$69B per million borrowers, but graduates with lighter debt earn more, pay more taxes, and need less welfare. Plus, Elon, you’d tweak Tesla AI to optimize this in a week—let’s redirect those billions smarter.
- Refinancing vs. Biden’s Forgiveness: Biden’s plan—wiping out $10K–$20K per borrower, costing $400B+—is a blunt, one-time giveaway, no strings attached. DOGEIE refinances $1.7T in debt to simple interest, saving $67K–$74K per $160K loan, scalable to all borrowers. It’s sustainable—cuts interest 51%–56% without erasing principal—and rewards effort, not handouts. Forgiveness punishes payers and inflates tuition; DOGEIE fixes the system, fuels growth.
- For America: Efficient education funding aligns with Trump’s “make it great” ethos and Musk’s “first principles” approach. No more subsidizing failure—reward winners, cut losses.
DOGEIE rewards all: Paid-off borrowers get 10% of interest back (up to $10K); debt-free grads claim $5K over 5 yrs; non-degreed workers at DOGEIE firms earn $500/yr for 5 yrs ($2.5K). Funded by uni fees, corporate cash—fairness for the responsible, no one left out.
The $69.63B hit stings, but here’s the play:
- Offset: Tax higher-earning graduates progressively—or cap the incentive at, say, $100K loans.
- Efficiency: Slash admin bloat in the Ed Dept (DOGEIE’s raison d’être).
- Innovation: Musk could tokenize student debt on a blockchain, sell it to investors, and recoup losses with a DOGEIE coin. Wild? Sure. Profitable? You bet.
Mr. President, you’ve promised efficiency—DOGEIE delivers. Elon, you’ve disrupted cars and space—education’s next. Let’s pilot this: 100,000 borrowers, $6.9B investment, track savings and GDP bump. If it works, scale it. If it flops, pivot. Either way, we’re not stuck with a 9% relic.
DOGEIE: Education that pays off, not weighs down.
Thoughts?