by Paul Moomjean
Does anyone else feel like we are leaving 2019 and heading towards 2022? After dealing with pandemic issues and election rioters, the next big implosion with residual effects is the student loan situation. As Americans begin to get back on their feet, they could be rocked by additional student loan repayments, possible paycheck foreclosures and, as a result, financial ruin. With February being the month President Joe Biden demands that people resume their payments, if there is no current and future restructuring, we could see a collapse like no other.
This student loan crisis is no joke. For those baby boomers who went to college on pennies for the dollar, it is difficult for them to understand the magnitude of the situation. A college education was the bill for products sold to Gen X, Gen Y, and Gen Z. And that had a problem: You might have to go back and get a degree, masters, or doctorate. There was a time in the 1950s and 1960s when a college degree was a luxury, reserved for teachers, lawyers, and doctors. Today, the average entry level job requires tens of thousands of dollars in debt. And for diplomas that are worth nothing. Liberal arts degrees in specific sociological areas such as gender studies, recreational behaviors, and communications provide students with a very limited set of useful skills, but with heavy debt.
US News reports, âThe average student loan debt for recent college graduates is nearly $ 30,000, according to US News data. . . Class of 2020 college graduates who took out student loans borrowed an average of $ 29,927. Most outlets report that 70 percent of students have borrowed for their bachelor’s degree.
So how did we get to where unnecessary and expensive degrees are now the norm?
On the one hand, the Department of Education allows federal student loans to go up to $ 30,000, while private loans can double. And the additional degrees are counted as separate loans. With semesters costing more than that, more and more loan programs have been created, forcing people to consolidate their many loans after payments are due, as interest rates rise. Students went back to school so they wouldn’t have to repay their loans, creating more debt. With so much money on the table to be clawed back through federal and private loans, colleges continue to raise tuition fees, knowing that 18-year-olds and their parents will take the amount of a luxury car or car. ‘a small house, hoping to buy a better future.
One quick fix Biden could bring in this area is to put limits on tuition fees at public schools that receive federal funding. You can’t let the taxpayers pour in and take more money in. That’s a lot of double deduction. According to California State University’s website, Northridge, âCSU’s operating budget has two primary sources of funding: the State General Fund and student tuition fees. State funding now covers just over half of CSU’s running costs, with tuition and fees offsetting the rest.
However, executive salaries are on the rise. The San Diego Times reports: â[Cal State] Chancellor Joseph I. Castro was hired in September 2020, amid the pandemic economic downturn, and his starting salary is $ 625,000, a 30% increase over his predecessor’s salary.
Biden must work with governors to set limits on salaries and leadership roles, as well as infrastructure, as most students don’t even use these facilities for more than two to four years. With more emphasis on online education, students won’t need million dollar dorms and student centers; teachers can work from home and be hired all over the world at more negotiable salaries.
Biden ran over a ticket promising student loan relief, but he failed. That bait and switch will be his âRead My Lipsâ¦â moment, and with people having to return to their government, they will lose their ability to save, buy a new home, invest and become entrepreneurs. An entire generation is too discouraged to be productive, and a nurturing culture can make them feel better, but that won’t pay the bills.
For 2022 and beyond, Biden will need to cap what state colleges can accept in student loans, cap the amount of repayment rates at $ 200 per month, and cap how much people can withdraw. Our economic future depends on it.