New Beginnings for California Graduates
Student Loans for the Future?
Student Loans for the Future?
Across our nation, our colleges have just graduated their latest crop of kids who will now move into the next chapter of their lives. As they say goodbye to their universities, they are handed the parchment they have worked so hard for and are now young professional adults. Some will stay on for graduate work, but the vast majority are now America’s newest best and brightest.
I was invited by an old friend to attend the graduation of his son at San Diego State University, one of the many ceremonies held on Aztec Mesa in May. As the students came off the stage clutching their cherished degrees, hugs and tears were exchanged with promises to stay in touch. In reality, this group will scatter off to new beginnings and adventures. One young lady with a degree in aviation engineering bubbled with excitement about her new job at JPL in Palmdale, where she will work on the next generation of space exploration vehicles. Another young man, whose degree was in microbiology, will remain at home here and take a position with a biotech firm in Torrey Pines. There are thousands of stories of hopes and dreams launched on graduation day.
How many of you remember as a child wanting to be a policeman or fireman? Then, a few years later, maybe wanting to be an astronaut, and then (as you worked through to the higher grades and learned more about what might be out there) an actor, musician, architect, doctor or lawyer?
For many, these hopes and dreams come with a high price still to be paid. Soon, the notes on the student loans that financed many of their educations will be due. It’s shameful that we nurture from childhood onward a choice of career paths that then burden us with crushing debt upon graduation. And every couple of years, it becomes more and more expensive to achieve that dream career.
The Obama administration took the student loan programs out of the hands of banks and placed them under the control of the federal government. The banks would compete for these loans and offer rates as low as 4%, with interested not started until after graduation and payments spread out at least 10 years. Today’s student loans offered solely by the government are 10% and can take as long as 30 years to repay. A doctor friend of mine explained it to me like this: “When I graduated, I had almost $400,000 in student loans to repay. [It’s] like graduating and having a mortgage payment to make on a house every month.” Today, most students repay many times over what was borrowed due to this high interest rate.
If the government wants to run this program, then they should make it easier for our students to get financed for the education they need to enter the workforce without being crushed with debt upon arrival. This can be done in several ways. Student loans should have an interest rate tied to the same as the U.S. treasury bonds the government issues to finance our nation’s debt. Currently, a 10-year U.S. Treasury bond yields 2.33% annually. Why should our young adults pay more than four times in interest what the government pays to borrow that same money? Many of our grads will choose one of our military branches after graduating, enlisting for six years or more. Their debt should all be forgiven upon completion of duty.
If America wants to have the best and the brightest, then we must make it more affordable and easier for our families. My father told me when I was young, “An education is the only thing you can get for yourself, but you have to earn it.” I believe our youth should get the very best education possible without getting robbed of their livelihoods.
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