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6 FACTS YOU MUST KNOW ABOUT STUDENT LOANS AND COLLEGE

DEBT
If the P-12 education system is all about preparing its students for success in adulthood, then college
preparation is obviously a must. In the fall of 2012, 66 percent of high school graduates from that year
were enrolled in college, and that number does not include students that waited longer to enroll or nontraditional adult students. It seems that P-12 classrooms are getting more students ready for the
academic demands of a college education but what about the financial commitment?
Currently, there is a call for a more affordable college education, which makes sense. It comes on the
heels of a recession that undercut the value of a college education. Even those with a college degree
were not immune to the financial hit that the economy took and those still paying off their student loans
were often left without the very job they had always assumed would pay off their educational debts.
I this arti le, I goi g to dis uss a fe i teresti g facts and statistics about student loans and debt that
will hopefully trigger a conversation about possible solutions to make college more affordable in this
country.
1. Graduates with advanced degrees are not immune to inordinate debt.
A study by the Urban Institute fou d that al ost 3 ,
A eri a s ith asters degrees ere o
public relief, along with 30,000 with doctorates. The average debt of a college graduate is $35,200 and
that can take decades to pay off.
2. Half of black graduates finish school with $25,000 or more in debt.
A recent Gallup poll found that in the last 14 years, around half of black college students graduated with
student loan debt exceeding $25,000. Only 35 percent of white students had loan debt that high.
Often the only way for black students to afford a college education is by taking on these loans. Four out
of five black students take student loans to attend college and typically have nearly $4,000 more student
loan debt compared to white students, according to a 2013 report by The Center for American Progress.
There is deep inequality here in the U.S. In 2013, the median income for black households was $34,600,
and the poverty rate is 27%, nearly three times that of white Americans.
3. College students with high debt suffer long-term health issues.
A ordi g to a e study ia Gallup. o , ollege graduates
ho took o the highest a ou ts of
student debt, $50,000 or more, are less likely than their fellow graduates who did not borrow for college
to be thriving in four of five elements of well- ei g: purpose, fi a ial, o
u ity, a d physi al.
The survey has an area of 25-years as Gallup only polled individuals who graduated college between
1990-2014. What the study found is that graduates who are burdened with $50,000 or more in student

loan debt may struggle to repay their loans, which in turn has causes them to delay making large
purchases, e.g. buying a new home.
Those saddled with debt are unable to save as much as their counterparts who do not have as much
debt or none at all, and Gallups thri i g gap, per e tages et ee those ith $ ,
i de t less
the per e tage of stude ts ithout it, sho s a
poi t per e tage spread et ee the t o parties.
The study also found that more recent college graduates seem to be performing worse than those who
graduated prior to 2000. Those who obtained a college degree between the years of 1990-1999 are
doing better socially, physically, and in purpose.
Student loan debt now outweighs credit card debt and has surpassed $1 trillion. With wage growth still
stagnant and many individuals going without full employment, this will mean more health issues and
many former graduates with void savings accounts as well.
These issues are not left ignored, however. The next few facts about college debt will focus on the
solutions proposed and implemented to tackle the issue of college affordability. For example:
4. President Obama has reformed student loans.
The Obama Administration has spearheaded college loan reform at the federal level. No stranger to
student debt himself (nor the First Lady), he has implemented payment reform starting this year. Under
this new plan:

New borrowers will pay no more than 10 percent of their disposable income towards
outstanding student loans.
Any student debt remaining will be wiped clean after 20 years.
Public service employees, like military members, nurses or teachers, will have their debt
forgiven in 10 years if they make their payments on time.

5. enator Mar o Ru io and Oregon propose paying it forward instead of paying loans a k.
U.S. Senator Marco Rubio spoke about his own efforts in his home state of Florida, and perhaps on a
federal level, to make college attendance a shared cost. Rubio is no stranger to college debt. When he
arrived at the U.S. Senate, he still had $100,000 in outstanding student loans. Rubio has been upfront
about his modest upbringing and also the power his education gave him but he has acknowledged that
the cost is too high. The basics of his college plan would allow private investors to pay for the tuition of
college students in exchange for a portion of their earnings later on. This would mean the students
acquired no traditional debt and would not start out their careers in the hole at least not in a typical
way.
Another college payment idea that is arising across the country is a state-run repayment program that is
si ilar to Ru ios pri ate i estor o e. Already i Orego the Pay It Forward program has been
approved (though not yet enacted) that will give students their public college education upfront, free of
cost, in exchange for paying the state a portion of their earnings post-college. Supporters bill it as a

de t free alter ati e to a ollege edu atio , ut like Ru ios pla there is still o ey o ed at the e d
of the college term that does impact actual earnings. It will be interesting to keep an eye on Oregon in
the coming years to see how the program impacts the first groups of students who take advantage of it.
6. Tennessee and Bernie Sanders want to make education free.
What if a pu li ollege edu atio
ere o pletely free, though? Thats the approa h Te essee
Go er or Bill Hasla
a ts to take he it o es to the states community colleges. At his State of the
tate address, he alled for free tuitio at Te essees o
u ity olleges i order to i pro e the
states reputatio as o e of the least edu ated. Hasla proposed that the o ey to pay for it o e
fro the states lottery earnings that would be placed in a $300 million endowment fund. While a shortter solutio , I
ot sure that this is a sustai a le pay e t pla . But if e e o e lass of stude ts i
the state are able to take advantage of it, that may make a huge positi e i pa t o Te essees lo gterm economic outlook.
Presidential hopeful Bernie Sanders has proposed trying to ease the student loan debt burden that
a y ollege graduates o arry a d hes proposi g so ethi g e e
ore radi al: free ollege tuition
to students who attend four-year colleges and universities.
Sanders plans to present his proposal later this week as a way to encourage future labor participation
and to combat the ever growing problem with student loan debt.
In his press release about his college tuition bill, Sanders also said that he believes passage of this
legislation will help place the United States back at the top of the world in the percentage of people who
graduate from college.
According to the Boston Globe by way of commondreams.org, the class of 2015 will carry a student loan
de t of $
illio a d is the ost i de ted lass i history.
a ders ill has a lose to zero per e t ha e of passi g. tillone has to admire his way of thinking.
Student loan debt is out of co trol a d so is the pri e of tuitio at a y of the ou trys est olleges
and universities. For lower income students, they are usually preyed upon by for-profit institutions with
promises of attaining a college degree and future job placement.
What do you think about the current affordability of college in the United States? Do you think that any
of the proposed solutions come close to hitting the mark?