Let's give graduates some debt relief

Posted

As students throughout our nation and here on Long Island graduate from college, they hope to start the next phase of their lives gainfully employed. Many will seek graduate degrees, but a common denominator of most graduates is an enormous student loan burden that is often much greater than their jobs will permit them to pay off.

From 2003 to 2011, outstanding student loan debt across the country increased from approximately $250 billion to over $900 billion, and in the third quarter of 2013, the figure exceeded $1 trillion. Cumulative student loan debt rose 20 percent from the end of 2011 to May 2013, even faster than credit card debt.

The mediocre economy, a tough job market and lower earnings only exacerbate the student loan crisis. Yet tuitions continue to soar. How do we expect graduates to meet their obligations under this crushing burden? Tuition and fees at community colleges, the most affordable colleges, are up 24 percent, way beyond overall inflation over the past five years. The tuition increases at public four-year colleges are even more staggering — a rate of 27 percent.

While the delinquency rate on those student loans climb higher than that of credit cards, mortgages and auto loans, the average student loan increased by 58 percent in just seven years.

It’s sad that lawmakers place such a low priority on the future leaders of our nation and allow them to be burdened with such huge debt, which many will find impossible to tackle and eventually overcome. Over the past few years, Congress has failed to pass any meaningful reform. It did pass a bill that prevented student loan interest rates from doubling, and Democrats did attach a measure to the Affordable Care Act that limited repayments to 10 percent of a borrower’s income and forgave the outstanding debt of those who made payments over 20 years.

But the high cost of repaying college loans is forcing young adults to live with their parents, not buy homes, and to delay marriage and having children. This is harmful to the economy.

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