A new report from the Project on Student Debt shows that student debt in 2010 increased 5% on average over the year before. Those same students are walking into a world where the unemployment rate for new college graduates is 9.1%. From the NY Times:
“Student debt goes up and it doesn’t ever go down,” said Mark Kantrowitz, the publisher of Finaid.org and Fastweb.com, two Web sites that offer advice on paying for college. “We’re clearly heading in the direction of decreased college affordability. Among lower-income students, the canaries in the cage that squawk first, we’re already seeing a decline in enrollment in four-year colleges and an increase in lower-cost two-year institutions,” he said.
When lower income kids can't afford to go to school, income inequality will continue to grow and solidify in our society.
More grim information available from Demos:
Only workers with at least a BA degree saw earnings increase over the last generation
Median earnings for young African-Americans are 75% of the earnings of whites; 68% for Latinos
Young women earn less than men at every level of education.
Twenty-nine percent of 18-24 year olds and 16% of 25-34 year-olds are underemployed
The percentage of young adults with jobs is at its lowest point in a generation
This all explains why the issue of student debt is being taken up by the Occupy movement. The website Occupy Student Debt gives students and former students a platform to share with all of us what impact that debt load has on their lives.
President Obama has announced plans to ease that student loan burden. From the NY Times:
At a press briefing Tuesday afternoon, Melody Barnes, director of the Domestic Policy Council, said the president would use his executive authority to expand the existing income-based repayment program with a “Pay as You Earn” option that would allow graduates to pay 10 percent of their discretionary income for 20 years and have the rest of their federal student loan debt forgiven. That plan would start next year.
Using executive authority means bypassing Congressional gridlock, thereby enacting a positive change. This new plan is good news for students and their families.
cross-posted at MainSt/workingamerica.org