Things I Know 249 of 365: Student loans should be a little easier

It should be a little easier. Just a little easier.

– Matt Kelley (played by John Connolly in The West Wing)

At the other side of this whole grad school experience, I’ll have a substantial pile of student loans awaiting me. Sometimes, late at night, as I drift off to sleep, I hear what I imagine to be scribbling in the ledger of my account.

This isn’t one of those posts where someone who made an informed decision complains about that same decision and vilifies some “other” in the face of having to deal with the consequences of that choice.

It is a post to say, it should be a little bit easier for anyone entering public service attending any school.

From state schools to private, on the other side of the diploma, the jobs we want those who have been trained up public service taking are not the jobs that will ensure a timely repayment of their loans or the development of disposable income that can be used to drive a more diverse sampling of the economy.

In the end, that’s what we want them to do.

Eight days ago, the financial aid office sent me sent out an e-mail blast for those student who will be taking on student loads for the next academic cycle regarding the passage of the Budget Control Act of 2011. Two provisions of the law were flagged as being of particular interest:

Elimination of the subsidy on Direct loans made to graduate students

Direct loans to graduate students beginning with the 2012-13 academic year will no longer be subsidized.  While the total amount that students can borrow will remain $20,500 per year, the full amount will be unsubsidized, meaning interest will accrue from the time the loan disburses.

Elimination of the upfront fee rebate on Direct Unsubsidized and Grad PLUS loans beginning with the 2012-13 academic year

Loans borrowed prior to 2012-13 had an origination fee of 1% for Direct loans and 4% for Grad PLUS loans. However, .5% of the Direct fee and 1.5% of the Grad PLUS fee were suspended and were waived if a borrower made their first 12 monthly payments on time.  Beginning with loans for the 2012-13 academic year, these upfront rebates have been eliminated.

I’m not in favor of lump-sum forgiveness of student loan debt. This post from the Freakanomics Blog explains why better than I ever could.

I am in favor of making it a little easier. It should be easier to attract folks to public service, to keep them there, and to help them live the kind of life suitable to someone who dedicates their time to serving others and the society.

Yesterday, President Obama announced a plan to help relieve student loan debt. It is a step in the right direction – a small step. We’ve a bit more of a walk ahead of us.

If you haven’t already and you’re heading to college or sending someone to college, pick up Anya’s Generation Debt.


One thought on “Things I Know 249 of 365: Student loans should be a little easier

  1. I disagree. A job is a job, whether in the public service sector or not.  Why do those who say they intend to go into those fields deserve breaks on schooling? It could be argued that in the end, all job are public service jobs because labor provides the means to live in one way or another. A job is a means to an end – either practically, financially or socially. A skill is offered and if valued, will be paid for accordingly by those who value it. [It is interesting to note that the most common public service “job” gets NO compensation whatsoever – parenting.]As for “Generation Debt” – it has more bad reviews on Amazon than good ones – and they are specific, detailed, credible ones at that. I'd be interested to hear more about why you would recommend it.Personally, I am furious about all the debt relief and mortgage relief being doled out. Where is the relief for people like me who worked hard, saved their money, lived and continue to live within our means, and pay our bills on time? As for college, we started saving when our kids were born, have never missed a single month of putting money away, and know that in the end, it will not only NOT be enough, but our kids will actually be PENALIZED because we saved. Education is valuable in and of itself, but education can come in many forms and I suspect that higher education was infiltrated decades ago by those concerned more with making money than enlightening or even training people.Perhaps the systems need to be made, but certainly not on the backs of the people who did the right thing in the first place.

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