The rising costs of tuition, economic turbulence and a less than fruitful job market are part of the recipe for the student loan debt disaster we are experiencing today. With more students borrowing for college than ever before, too many are finding themselves in financial hardship over their repayments after graduating. So what, if anything, is being done?
A Challenging Problem
Since the revisions to the bankruptcy code in 2005 make it extremely difficult to include student loan debts in a bankruptcy filing many graduates suffering financial insolvency are left to search out other options. While there are some government programs and consolidation options available it isn’t to say there are no solutions, but successfully finding them can be difficult. Even with the few current solutions to help, not enough people are finding the relief they need. How do we help those in need now, and prevent others from experiencing the same?
On a resolution front, President Obama proposed a bill last week to expand the Pay-As-You-Earn program to reach more borrowers in need. The program caps the monthly payment requirement to 10% of discretionary income. Similarly, Sen. Elizabeth Warren is fighting a battle in Washington to allow for more borrowers to refinance their loans to lower rates. This week, her bill was reportedly struck down, but she is continuing to push for refinancing efforts.
On a preventative front, ideas are swirling around the internet and some companies are even jumping on board. Starbucks announced last week that they will be offering tuition reimbursement for their employees who receive their bachelors degree through Arizona State University online. Starbuck employees who work at least 20 hours a week will receive $6,500 for the first two years, then receive the full tuition reimbursement for the addition to years.
Both the government and corporate efforts are expected to have a positive impact on the struggling student loan debt industry, if for no other reason than continuing to raise awareness for the need of a long term solution.