"Direct mail offers are flowing for business credit cards, many with attractive promotional interest rates and balance transfer deals...while there are many reasons to open an account, there can be substantial risks involved."More info
"Late last month, Penn president Amy Gutmann and the the university board sent a clear and powerful message to high school graduates from lower-income families:You can afford to go to college.
If you're admitted to Penn, you can graduate without the burden of unmanageable student loan debt. By promising to replace loans with grants, which do not need to be repaid, for students from families with incomes below $50,000, Penn is taking the lead with other elite universities to address growing concern about student debt and ensure their doors are open to all qualified students.
While we celebrate Penn's announcement, we must recognize that very few public universities or community colleges - schools that educate most of our nation's students - can afford to do the same. More and more students and families take out loans, and student debt burden is an increasing problem.
Nationwide, two-thirds of all students now graduate with student loan debt, compared with less than half in the early 1990s.
The average debt has risen by more than 50 percent in the last decade, even after inflation. In our own back yard, more than 70 percent of graduates from Drexel, La Salle, Lincoln, Penn State-University Park, Philadelphia University, Temple and Widener now leave school with debt exceeding the national average.
Moreover, these sobering numbers still do not tell the story of lost opportunity for students or society. They don't describe the young people who forgo college or drop out to avoid going into debt. Or those who can't afford to take vitally important jobs as teachers, social workers, nurses and journalists because their loan debts are too large.
The numbers don't tell of home purchases deferred or retirement funds that don't get started or shrink when they should be growing in order to pay off student loans. A college education should strengthen family security, not put the financial future of so many individuals and families at risk.
To be sure, higher education is crucial to our nation's economic competitiveness. A college graduate will, on average, earn $1 million more over a lifetime than a high school graduate. Better-educated young people contribute more to the tax base and are more likely to vote and to volunteer.
America desperately needs well-educated citizens to teach the next generation, serve in our police forces, start new businesses and care for the sick. But while college can give students more tools and options for work and life, it shouldn't cost families their economic security.
At The Pew Charitable Trusts, we have been working to identify affordable, common-sense solutions.
One option is to limit student debt payments to no more than 10 percent of a person's annual income so that young people who take important but lower-paying jobs don't face unmanageable payment expectations.
Another is to improve provisions to ensure that young people facing economic hardship, such as that caused by a lost job or major medical crisis, won't find their credit ratings destroyed if they can't make their payments.
Families today face extraordinary financial challenges on many fronts - health care, housing, retirement and college education. And, ironically, it is precisely the strong earning potential from a college degree that can make those challenges manageable.
It's time to help. Penn is taking a leadership role in recruiting talented, low-income students and ensuring that they can start their lives without crushing student loan debt.
But, as a nation, we still have a long way to go to make that possibility available to all students."
Rebecca W. Rimel is President and CEO of The Pew Charitable Trusts, which funds the Project on Student Debt.
- Date added:
- Apr 11, 2006
- The Project on Student Debt
Eleni Constantine, director of the Pew Health Group’s financial security portfolio, issued the following statement in support of legislation creating an “automatic IRA,” S. 3760, introduced by Sen. Jeff Bingaman (D-NM) and H.R. 6099, introduced by Rep. Richard Neal (D-MA).More info
“The student loan proposal announced by the President today could not come at a better time, as the weak economy and high unemployment are making it harder than ever for people to make monthly payments on their student loans."More info
Yesterday the U.S. Department of Education released a preview of college “cohort default rates” for federal student loans using a more robust methodology that will take effect in 2011.More info
The Project on Student Debt's fourth annual report on the student loan debt of new college graduates. The analysis of the most recent available data found that student debt continued to rise even as it got harder for recent graduates to find jobs, and that debt levels vary considerably from state to state and college to college.More info
Despite the availability of federal money, many students rely on private loans from banks. According to TICAS's Project on Student Debt, the proportion of undergrads who took out such loans jumped from 5 percent in 2003–04 to 14 percent in 2007–08.More info
Starting July 1, borrowers will have a new option: a repayment program that caps monthly payments based on income. It targets borrowers who would have a hard time paying basic living expenses if they had to make standard monthly payments on their loans, says Lauren Asher, acting president for the Project on Student Debt.More info
J. Mark Iwry Joins Treasury as Senior Advisor to the Secretary and Deputy Assistant Secretary for Retirement and Health Policy
The Retirement Security Project announced today that J. Mark Iwry, Principal of The Retirement Security Project, Nonresident Senior Fellow at the Brookings Institution, and former Treasury Department official, has been appointed by Treasury Secretary Timothy Geithner as Senior Adviser to the Secretary and Deputy Assistant Treasury Secretary for Retirement and Health Policy, effective April 27, 2009.
President Obama’s Budget Includes Automatic IRA Proposal and Expansion of Saver’s Credit for 401(K) IRA Savings
The Administration’s budget outline, released today, includes the Automatic IRA proposal developed by the Retirement Security Project.More info
One in 18 homeowners in Arizona is estimated to be in foreclosure by the end of 2010, as a result of a subprime-related loan. Years of easily accessible credit and relatively low home prices that facilitated homeownership in the state have ended, leaving in their wake stricter lending terms and stagnating home appreciation.More info
McCain and Obama Agree on an Important Policy Proposal – The Retirement Security Project's Automatic IRA
In the midst of a campaign with opposing views on most aspects of domestic policy, the presidential candidates have now both endorsed the Automatic IRA.
As traditional pensions fade from the retirement landscape and workers are forced to take a lot more responsibility for their own financial futures, employers are rolling out a variety of features to help workers prepare for retirement.
There's no shortage of retirement-savings services for the affluent. But for those who fall in the middle of the wage scale or lower, it's a different story.
"Frustrated by the slow pace of federal relief, states around the country are pouring hundreds of millions of dollars into their own programs to stem the rising tide of home foreclosures."