The Student Loan Crisis CAN Be Fixed,
It Will Just Take Some Extra Work
It’s not new news that attending a college or university will leave the students pockets light of cash and their debt even heavier. The cost of tuition and expenses that go along with living the life of a college student are through the roof and are only getting more expensive. This leaves little room for comfort upon graduation and the beginning of student debt payments. The next step after graduation is finding a loan payment plan that will work with the student’s finances. This is where the issue comes about.
Haley Garberg was making 22 thousand dollars per year and was given a payment plan that was $700 per month. Hew salary was not enough to live off of even before the steep monthly payment for her education. This was given to her based on her salary, which is in the bottom 25th percentile of all United States salaries. No payment plans are flawless, but the one that seems like it would best benefit the former students often is a nightmare in disguise. Income Based Repayment is broken and if fixed, could significantly help the crisis at hand in the United States.
The Federal Student Aid of the United States Department of Education has plans in place to customize a payment plan based on the borrower, but does not look further than what is on the surface. Nothing is taken into account other than the annual salary of the borrower. This is where the problem stems, because they fail to realize that people and areas across the country are different. On average, four years of college equates to 15 years of payments.
Instead of just looking at a number on a screen stating the annual salary of the applicant and plugging it into a basic algorithm, they should go just a couple steps further. Living in New York City is obviously more expensive than living in a small town in the midwest, yet two people of the same salary will receive the same payment plan. The cost of living should be taken into account for each person individually. Not only are the salaries taken into account, but the average cost of living in the region should be too. The average salary of people living in tristate area is higher than the average salary of the midwestern states, rooting from the cost of living. By basing the monthly payments off of not only how much the person’s salary is, but also how much it costs to live in these areas, this would allow for both people to live more comfortably and have a plan that is right for both of them. The big companies who are in charge of setting up these plans need to start doing this and the time is now.
If a plan like this were to be put into place then young Americans who are newly on their own two feet will be able to become integral parts of society and the economy. Dreams of becoming active members of society and obtaining a financially stable life are getting out of reach, when they do not have to be. A couple more steps deeper into each individual case would fix the student debt crisis that is sweeping the nation.