Currently Americans as a whole owe more than one trillion dollars in student loan debt alone. Due to rising costs of tuition and a decline in the job market which would allow students to pay back their loans, the amount has jumped dramatically over the last several years. The trend seems to be that the number will continue to increase at this quickened pace if something is not done to solve the problem.
Although this problem has steadily increased over the last twenty years or so, there have been recent developments and actions by the government to help individuals and to solve the problem in the future. Not a lot of people are aware of the possible personal solutions available to them; this is a problem that the government is seeking to address. In addition, the President announced a new plan involving a rating system for colleges and universities which he believes will help prevent the problem from getting worse in the future.
Awareness about Programs Available to Help
There is one program that was passed in 2007 to help people who work in certain career fields that are considered underpaid in proportion to their debt amount. Public service workers who owe huge amounts in loans are often looking for debt relief because their jobs do not pay well enough to make a decent living and to pay their entire student loans back. This program is available to people who have jobs for nonprofit organizations or who work in government. The idea behind the program is that if the loan amount is high and the income is low, then the employee can work for ten years, and pay consistently on their debt. Then, at the end of the ten years of service the remainder of their student loan debt will be forgiven.
The program seems almost too good to be true for social workers, counselors, and other workers who have to go to school for several years just to get a low paying job. However, the program is underused because, like most laws, it is complicated and not well publicized. The Consumer Financial Protection Bureau started a program last month to help companies and their employees figure out the debt solution policy and to help them see if they are qualified for the program. These new awareness and simplification tools should help millions of people who are currently in student loan debt.
New Rating System for Federal Funding
Additionally, at the end of August, President Obama announced his plan for rating colleges and universities according to several factors such as: tuition, loan debt, and average earnings of graduates. His plan is meant to make more cost effective education centers more attractive to potential students by providing more money for federal loans. Opponents to the idea believe that it will just force low income students into the schools with worse reputations while people who have money will be able to attend the better schools.