For the last 25 years, the cost of a college degree increasingly has become too expensive for many Americans.
The blame lies primarily on state governments that have consistently cut funding to public higher education, shifting more and more of the cost to individuals.
The result, predictably, is that a higher education, once again, is viewed as the purview of the elite — or those willing to shoulder debilitating debt.
Today, around 45 million people owe $1.6 trillion in student loans under the umbrella of the federal government’s Department of Education.
The minute they walk out of college, these 20-somethings are saddled with debt the size of a down payment for a house or a car that will shape their decision-making for years to come.
The current payback plan gives a student 20 years to pay back her loans, which are capped at $60,000.
For many who have student debt, the payback schedule is unrealistic for a number of reasons, including the rising interest rates on the loans and the basic fact that pledging 10% of your income over 20 years — the government’s recommended minimum pay-back plan — for most folks leaves little to spare for the majority who have student loans.
Today, one in five students have defaulted on their loans. Forty percent of those students left college without getting a degree.
Those students “have the worst of both worlds — debt and no degree,” said President Joe Biden last week.
Ever since March 2020, students have had a reprieve from this burden from measures passed by Congress in response to the COVID-19 pandemic.
That suspension ends Jan. 1, 2023.
BIDEN — one of a handful of U.S. Presidents not to attend an Ivy League college — announced last week a plan that would help students saddled with student debt.
The plan has three legs.
1. Forgive up to $10,000 in debt for any borrower who earns less than $125,000 a year. Yes, that’s a high income, but it includes the biggest swath of students and eliminates the doctors, attorneys, Silicon Valley techies and other high-earning professionals;
2. Forgive another $10,000 for those who attended college on a Pell Grant, funding for those from low-income households. About 60 percent of student loan borrowers are Pell Grant recipients whose families earned about $30,000 a year. The Education Department is estimating that this combined $20,000 in debt forgiveness will reach about 27 million borrowers.
