By Pam O’Dell
New results from a study reveal that many college graduates are unable to find a job that makes use of their four-year degrees. Over 50 percent of students who entered college after 2007 still require financial assistance from their parents according to answers given.
The study, performed by the Norton School of Family and Consumer Services within the University of Arizona, followed 1,010 students for over 5 years. The study was funded by the National Endowment for Financial Education and the Citi Foundation.
Graduates with poor job prospects burdened by student loans responded with paltry expectations to questions concerning their plans for the future. Nearly one-third of respondents claimed that owning a house and having children was not important to them.
According to the New York Federal Reserve, college costs have increased three fold within the last 8 years. The national average student loan exceeds $30,000.
Now financial institutions are worried that the nation may see a similar collapse in student loan repayments to what was seen with housing loans. The national cumulative student loan debt is around $1.2 trillion.
Concern about a ‘domino effect’ within the mortgage and housing industries, many financial institutions are putting pressure on the federal government to reduce student loan payments – a move which should enable borrowers to qualify for home ownership and like purchases equated with the ‘American Dream.’
According to Collegemea sures.org, Georgia, well known as a high home foreclosure state, also boasts a 7.1 student loan default rate. The national average hovers around 3 percent.
While the cost of attaining a degree averages $50,982, in Georgia 53.3 percent college graduates fail to graduate.
Last week, President Obama signed an executive order capping student loan repayments at ten percent of the borrower’s income and forgiving any unpaid debt after 20 years.
The action expands the federal “pay as you earn” program for students enrolled after December 2014.
According to a whitehouse. gov fact sheet on the program, the monthly payment for a student earning $30,00 per year, owing $20,000 in college loans will be reduced by more than $110 per month under the new provisions.
The plan would reduce the monthly repayment based on the income of the borrower.
The program is estimated to cost $68 billion dollars over the next 11 years.
Republicans have criticized the expansion as failing to help already indebted students and ignoring the problems of college in affordability.
Generation Opportunity (a conservative fiscal policy think tank) called Obama’s proposal “political pandering,” and nothing more than “desperate attempts to stem the bleeding before the midterm elections” of dissatisfaction among young voters who have lost faith in Obama.”
O’Dell provides news on state government through, The O’Dell Report in newspapers in North Georgia and her blog, odellreport.com. She can be contacted at pamodellreport@ gmail.com