While Congress has finally agreed upon a deal that prevents federal student loan rates from doubling, students are hardly in the clear. The bipartisan agreement lowers rates for this upcoming academic year, but then pegs them to the financial markets. As a result, future students will almost certainly pay more. If the federal governement is ever going to address student debt in a real way, it's clear that we face an uphill battle.
Despite this, there is hope in the struggle to confront our $1 trillion student debt crisis. After a campaign lead by the state Working Families Party and college students at Portland State University, Oregon recently passed a bill that instructs the state's Higher Education Coordination Commission to develop a "Pay It Forward, Pay It Back" plan to finance public higher education. Under the plan, students pay nothing while in school, then pay a fixed percentage of their income (3 percent after a 4-year degree) to fund higher education going forward. As Katrina vanden Heuvel writes, the idea represents a "huge stride toward putting an end to the crushing debt horror stories which Occupy Wall Street helped to place on the national radar."
Since 2003, the average student loan burden for a twenty-five-year-old with student debt has grown an astounding 93%. With 10% of student loan borrowers owing more than $54,000, many young people are finding large purchases such as a house or car to be nearly impossible. Clearly, the status quo is not sustainable. Write to your state representatives now and implore them to introduce a "Pay It Forward, Pay It Back" plan in your state.
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