If you recently earned a B.S., an M.A. or a Ph.D., chances are someone is holding a big IOU.
With tuition in the stratosphere, today’s graduates are facing the highest student-loan and credit-card debt levels ever — and the worst job market in a generation.
“The American Dream gets crammed down your throat — you gotta work hard, get an education, all that’s going to pay off for you,” said Will Mohring, 30, of the District, who graduated from the University of San Francisco last year with $80,000 in combined government and private student loans.
“But when you get out of college it becomes difficult to finance your American Dream. How do you get married with a lot of debt? How do you buy a house with a lot of debt?” he said.
The plight of students like Mr. Mohring has spurred legislation to help, and advocacy groups are lobbying for more.
As of July 1, federal student-loan payments can be adjusted for income, with the remaining balance eliminated after 25 years. Those in public-service jobs can have their loans forgiven after just 10 years of payments. In addition, interest rates on new need-based loans were reduced from 6 percent to 5.6 percent, and Pell Grants will rise to $5,350 this fall.
All are provisions of the College Cost Reduction and Access Act, sponsored by Rep. George Miller, California Democrat, and signed by President Bush in 2007.
“With the economy against this year’s graduates, this relief couldn’t come at a better time,” Mr. Miller said in a statement.
The Class of 2009 finds itself in the worst job market in 25 years. Unemployment for all 20- to 24-year-olds is more than 15 percent, according to the Bureau of Labor Statistics.
Just 20 percent of this year’s graduates who applied for a job have one, down from more than 50 percent two years ago, according to the National Association of Colleges and Employers.
The average student graduates with about $22,000 in debt, according to the Project on Student Debt, a Berkeley, Calif., nonprofit.
There is an estimated $700 billion in outstanding student loan debt — enough to merit its own bailout, some say.
Student groups applaud the changes, but say they do not address what they view as the underlying problem: tuition gone wild.
“What happens if you raise the loan limits is the colleges raise their tuition,” said David Smith, 29, founder and chairman of mobilize.org, a Washington-based group focused on college affordability.
Mobilize.org, in turn, is a leader within 80 Million Strong, a new grass-roots advocacy and lobbying coalition dedicated to addressing high youth unemployment, high student loan debt, credit-card lending practices and health insurance.View Entire Story
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