(A ridiculously large number)
By State Representative, Leon D. Young
We’ve all heard the mantra: If you want to get ahead in American life, then securing at least a college degree is a must. Consequently, millions of Americans (both young and old) have opted “to drink the Kool-Aid” by pursuing a college education.
However, in attempting to do so, millions of students have racked up staggering financial obligations.
This is hardly a trivial issue, either for college graduates of the U.S. economy.
Student loan debt ticked past $1.2 trillion and the average student graduates with $26,600 of debt.
Considering the average tuition bill is $30,094 at private universities, it’s reasonable to conclude many students graduate with much higher debt.
Moreover, student loan debt now exceeds credit card debt, which is dragging down the economy as borrowers avoid mortgages and other spending that boost the country’s financial health.
In response to this growing crisis, Senator Elizabeth Warren (DMass) introduced legislation to stop student loan interest rates from doubling to 6.8 percent in July.
More specifically, she proposed that the Federal Reserve loan money to students at the same rate it charges too-bigto- fail banks – which is next to nothing at 0.75 percent.
However, in typical Washington fashion, the Do-Nothing Congress did just that again last week when the Senate failed to advance Warren’s student loan refinancing bill.
After politicians gave their usual lip service on the seriousness of the problem, lawmakers did little else to address the issue.
President Obama has put forth his own two-pronged plan that involves supporting Sen. Warren’s bill and expanding an income-dependent repayment cap to lower monthly student loan payments.
Under Obama’s Pay As You Earn plan, low income borrowers could make smaller payments for 20 years.
Any balances remaining would be forgiven.
Currently, there are only 200,000 participants in the plan.
And just last week, President Obama signed an Executive Order calling on the Department of education to expand a program to lower monthly federal student loan payments for 5 million student loan borrowers.
The president also used the signing event to bring attention to a new bill introduced by Sen. Elizabeth Warren called the Bank on Students Emergency Loan Refinancing Act (S 2432), which would allow student loan borrowers to refinance their debt at the lower interest rates currently offered in the student loan program.
This would allow the nearly 40 million Americans pressed by student loan debt to begin saving hundreds to thousands of dollars a year and in turn stimulate the economy.
More importantly, the act pays for itself by implementing what’s called the “Buffet Rule,” which closes tax loopholes for people who make over $1 million in a given year.
This begs one last question: Isn’t it in the national interest to invest in our young people, rather than loading them up with impossible student loan debt?