Obama acts to ease student loan debt
Freddie Allen | 7/7/2014, 1:10 p.m.
WASHINGTON (NNPA) – From 2003 to 2014, student debt in America skyrocketed from $250 million to $1.2 trillion, surpassing credit card debt. As more students, especially Black students, rely on grants and loans to get through college, President Barack Obama has stepped up with a series of executive orders to ease the pain of borrowers in college and after they graduate.
A 2012 study by the Center for American Progress said that 81 percent of Blacks who earned bachelor’s degrees graduated with debt compared to 64 percent of White students.
According to the CAP report, “African Americans, are graduating with more student debt: 27 percent of black bachelor’s degree recipients had more than $30,500 in debt compared to 16 percent for their White counterparts.”
Fifty-six percent of Blacks aged 18 to 34, saddled with debt, postponed buying a home because of the ailing economy.
Obama issued the executive orders the same week the White House released a report that detailed the student debt crisis, state-by-state.
Student loan borrowers in California topped the list, owing more than $100 billion. Borrowers in New York owed more than $73 billion, in Texas more than $71 billion, nearly $62 billion in Florida and about $50 billion in Pennsylvania.
There’s no denying the impact of a college education on the lifetime earnings of a graduate.
“The median annual earnings among recipients of a bachelor’s degree or higher (age 25 and over) with full-time work was $62,300 in 2013, or $28,300 more than their counterparts with only a high school diploma,” the report stated.
Unemployment rates for young Black college graduates are also significantly lower than the jobless rates for Blacks that only finished high school, 13.1 percent compared to 34.7 percent, according to a 2014 report by the Economic Policy Institute, but rising tuition costs continue to imperil the dreams of millions of young Blacks.
“Over the past three decades, the average tuition at a public four-year college has more than tripled, while a typical family’s income has barely budged. More students than ever are relying on loans to pay for college,” the report explained. “Today, 71 percent of those earning a bachelor’s degree graduate with debt, which averages $29,400. While most students are able to repay their loans, many feel burdened by debt, especially as they seek to start a family, buy a home, launch a business, or save for retirement.”
The report continued: “For too many low- and middle-income families this essential rung on the ladder to opportunity and advancement is slipping out of reach.”
Many Black families are unable to contribute financially to help cover college tuition, making student loan programs even more critical for those students. However, defaulting on student loans can have lasting consequences, including damaged credit ratings, garnished wages and can even have a negative impact on future employment prospects, the report said.
Working with the Department of Education, Obama launched the “Pay As You Earn” program that caps loan payments for students already making payments at 10 percent of their monthly earnings.