For many collegiettes, life both during and after college is dominated by one thing: money. While in school, students often struggle with coming up with enough money for gas and groceries. Schedules and homework often deter them from work. However, during that time, the debt is piling up. After graduation, those same students find themselves struggling to find work, live and pay off loans.
In some cases, the struggle becomes so difficult that young adults move back in with their parents. According to a study cited by the Chicago Tribune*, 22% of young adults live in multi-generational homes. This number is up from 16% in 2010. Sixty-one percent of that same population knows someone who has made the move back home.
This means that our generation is not buying houses or cars, investing, or innovating. Many are just struggling to live. In an already damaged economy, this situation is detrimental.
Hopefully, this is concerning to collegiettes. It is more than just relevant to our lives: it is our future. The good news is, Representative Hansen Clark from Michigan is on our side.
He has proposed the Student Loan Forgiveness Act of 2012**. It is intended to limit the amount of money students owe back on their government loans. In theory, this action will allow them to help stimulate the economy by entering the housing market and putting money into other areas.
So what does Clark’s proposal really mean for collegiettes?
The main provision is called the 10/10 Loan Repayment Plan. It requires students to pay back only 10% of their annual income toward government loans. After 120 of these payments (one payment per month for ten years), a forgiveness provision of up to $45,520 is activated. This means that the student will not have to repay the remainder of the loan, as long as it is at or below that figure. However, it requires the payments to be taken electronically from a bank account. There are also other concerns for lower-income students.
The second benefit of this plan is that it will cap all federal loan interest at 3.4%. This is a huge improvement because as of July 2011, students were paying up to 6.8% on Stafford loans. These are graduate student loans, but this cap applies to all federal loans.
For graduates who go into the public service sector, loan forgiveness will kick in after 60 monthly payments rather than 120. This includes government and non-profit work, as well as various others. There is also a provision that will help students to pay off private loans. These are not protected by the government, but can be assisted by this bill.
Of course, collegiettes should do plenty of research before deciding how they feel about this bill. As it was just announced on March 8, there is not a lot of information beyond exactly what it says. However, if you want to learn more, there are numerous news articles available through internet search engines. SignOn.org (http://signon.org/sign/support-the-student-loan.fb1?source=s.fb&r_by=3715907) also has links to more information, as well as the full proposal. On this site, you can also sign the petition in support for the bill.
This is important information for collegiettes™ to be aware of, as it can affect our entire generation’s future.
Stay informed and get involved!
Sources:
*http://www.chicagotribune.com/news/sns-201203211013usnewsusnwr2012032003…
**http://www.usnews.com/education/blogs/student-loan-ranger/2012/03/21/lea…