Earlier this month, Fox News host John Stossil was heard saying college is a scam; pushing your child to go only leaves with them with large loans to repay on blue collar wages; anyone suited for college is smart enough to make it without college. I think some of what he said is right. People like Bill Gates, Steve Jobs and other billionaires had imagination and a dream and their line of work wouldn’t physically or mentally harm someone. Professions such as doctors, teachers, scientists and more should require college.
On October 19, 2011 Good Morning America (GMA) reported that the Federal Reserve Bank of New York said outstanding student loan debt is at $1 trillion. A survey by the College Board found that tuition at public colleges and universities went up an average of 8% since last year while private institutions rose 4.5%. ABC News reported the cost of college has risen 900% in the last 30 years. The latest statistics show 80,000 bartenders and 17% of baggage porters and bellhops have degrees. Barbara Walters said she has friends in their 40s still paying off student loans.
The amount of undergraduate borrowing has increased 57% over the last 10 years; with two-thirds of graduates owing an average $28,100 when they leave private colleges. Because of this, per the Census Bureau, 5.9 million 25 – 34 year old college graduates (85%) have moved home with their parents, up 25% in just 4 years.
On October 26th, GMA reported that the President is proposing a plan via Executive Order (as Congress is not moving on the Jobs Act) to cap student loan payments at 10% of discretionary income beginning January 1, 2012. The plan will allow some borrowers to consolidate loans. As student loans cannot be excused in bankruptcy, the President’s plan will allow a teacher making $30,000 and owing $60,000 to pay $113 a month instead of $690. Unfortunately the plan can only apply to federal loans; it does not reign in the rates on private loans.
The President’s plan is not perfect but it is a step in the right direction.
No comments:
Post a Comment