Student Lending Modifications: Hey, It’s a Start…
...but only that.
The word is out that the President will be announcing executive orders to assist college students and graduates who are mired in debt. The changes, which accelerate congressional actions, are threefold:
- The maximum repayment is to be capped at 10% of income instead of the present 15%;
- Any debt remaining will be forgiven after 20 years instead of the present 25 year period;
- Loans from two existing programs will be consolidated at a rate approximately .5% lower than it currently is.
The expectation is that the changes will apply to approximately 7.5 million people with individual savings of about "several hundred dollars" monthly. Let's do a back-of-the-envelope exercise to ascertain the effect here. Assume that there are 7.5 million affected with an average monthly savings of $300, or $3600 annually. The total annual savings are in the vicinity of $27 billion (7.5M @ $3600), which is less than 3% of the approximately $1 T owed for higher education.
It's a start, but it amounts to tinkering with the machinery. It doesn't go to the root issues that face our youngsters. First, that the rate of inflation for tuition continues to rise at a clip disproportionate to the overall CPI and is now far more outsized to the average family income than it was several decades ago. Second, it doesn't address the fact that there are simply very few sustainable, living wage jobs for graduates. Until these core issues are addressed, either by the market or the government via some workable, commonsense policy, then the kids are going to continue to face difficulties that force them to postpone their true adult lives, out of the nest and on their own.
ARTICLES BY CATEGORY
Basics for Dads
- Back to the Beginning…What is the point of raising a child?
- Volunteering: When Did I Become That Cub Scout Guy?
- Redefining Fatherhood - A Response
- A PracticalDad Look at Concussions
- The Virus Cocktail
- Kids and Pot: Discussing the Long-Term Effects
- Driving Up the Cost of Higher Ed: Bette and the New Educational Baseline
- Driving Up the Cost of Higher Ed: Globalization and the Knowledge-Based Economy
- The Cost of Higher Ed: “How in the Hell Did This Happen?”
- The Kids Are Paying Attention
- If it’s not about me, then who is it about?
- Keeping in Touch as Kids Age
Dad and Mom
- Cancelling Christmas? Yeah, I’m Down With That…
- Is Embarrassment a Disciplinary Tool?
- Controlling Your Kids
- PracticalDad Price Index - September 2016: The Potemkin Village Shelves
- PracticalDad Price Index - August 2016
- PracticalDad Price Index - July 2016: Confirming Deflation
Family / Personal Economics
- PracticalDad Slang: Of Opies, Forcepushing and Duckpecking
- If You Give A Mouse A Cookie, v. 2
- PracticalDad Physics
- Playing With The Kids: How Badly Do I Want To Win?
- PracticalDad Solutions: Uniform Hooks
- “Do I Have To Go?” Taking the Kids Along
- Dystopia Comes Home
- When School Technology Programs Affect Family Policy
- When Does the Academic Push Become Too Much?