Student Loans in the News

In my inbox today was a news bite about how student loans are finding their limelight in the US presidential race.

President Obama is taking a stance on the potential rise in interest rates for undergrad student loans. With the election heating up, issues like these that affect middle America can make a big difference. Practically speaking, the proposed hike in rates would leave students with about $1000 in extra debt per year. While this is nice that Obama wants to keep the rates low, I can’t help but argue that this still isn’t quite enough to ease the financial strain of higher education in America. (Full story at  Slate)

Amount of Student Loans Rising

Surely if you have student loans, you’ve done the ‘compare notes/woes’ session with some friends… the US national average for a graduating class of 2011 was about $25,000 which I even find to be quite a bit low. I think if you are lucky enough to fall within this average or below, you’ll watch the interest rates more closely because I’m assuming you have an exit strategy with repayment. For many Americans, the totals realistically look a lot closer to $50,000 – $100,000 + (much much more for the medical and legal professions). If you don’t believe me, have a flick through Huffington Post’s Majoring in Debt slideshow which is what I do when I’m feeling a little down about my total. Once you pass the 50k mark, a few thousand here and there seems like a drop in the bucket…

I think Obama’s stance on student loans is necessary, though as someone who values education more than my paycheck and subsequently can’t stimulate the economy that much until I’m retired, a little extra reform to supplement freezing the rates would be appreciated. How’s that you ask? Well, I’ll leave the policy writing to someone who paid for a law degree, I’ll stick to the OP-ED.