News Column

EDITORIAL: Student debt reflects cost

June 11, 2014

Standard-Examiner, Ogden, Utah

June 11--President Barack Obama has provided a little relief to some of the countless Americans who carry student loan debt but nothing is being done to address the consistent increase in higher education tuition costs.

That, as well as a still jobs-stingy economy, are the main reasons that student debt has become such a tough burden for so many. But lowering tuition costs and creating millions of well-paying career jobs are not deeds that can be accomplished by executive order or through legislation.

So the president on Monday took a baby step to help borrowers, which is all that can be done by fiat. Obama extended a 2011 program for some student loan debtors, Pay as You Earn, which allows those student loan borrowers to limit payments to 10 percent of their income. Before Monday, Pay as You Earn was only available to those who had taken student loans after October 2007. It now applies to those who took out loans prior to those dates. Pay as You Earn also forgives loans after 20 years of payments, or 10 years for those who work in the public sector.

However, none of Obama's action on Monday helps student loan debt holders who borrowed from the private sector. The president did endorse a bill from Sen. Elizabeth Warren, D-Mass., which would allows students to refinance student loan debt from all sources, public or private. Warren's bill would offset costs by raising taxes on millionaires. But frankly, the Warren bill is going nowhere in Congress; it was tabled in the Senate on Wednesday, One key reason is that student loan debt rates are already low compared to other loans.

Congress could work on lowering the high rate -- one in seven -- of student loan defaults. One solution is taking the 10 percent income-based payment schedule and applying it to all loans. That would help graduates better understand a loan's details.

Ultimately. the best remedy for lessening student loan debt is an improved economy that begins creating more jobs for graduates and others. Also, we need a serious national conversation over why tuition rates exceed the rate of inflation, thereby making it imperative for millions to turn to student loans.


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Source: Standard-Examiner (Ogden, UT)

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