Tuesday, November 15, 2011

College Debt - $25K in the Hole

The New York Times reported a couple weeks ago that the average student debt for someone graduating in 2010 was $25,250.  That's equal to the annual income of someone making $12.14 per hour, or someone making $5 an hour over minimum wage.  Throw in an unemployment rate of 10% and stagnant or receding wages, and we're about to have a major crisis on our hands.

That's just undergrad.  We're not even adding on the cost of a Masters in Education or a Law Degree or becoming a Neurobiology Researcher.

Which is why people have to seriously consider looking at President Obama's plan to reduce the impact of student loan debt.  Payments are capped at 10% of income to repay federal loans, and last for 20 years.  If you land one of those nice, cushy 1%-er jobs, you'll pay back your loans in full.  However, if you are a junior high school math teacher, you'll probably have a portion of your debt forgiven. 

But, it's only federal loans.  It does nothing to address the cost of college to begin with.  What keeps me from enrolling in graduate school is the price tag.  Really?  I'll spend $100,000 for a job that pays $10,000 more per year, and lose 2 years of earnings to do it?  Something needs to be done.  This may be a good first step.

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