President Barack Obama signed an executive order that lets borrowers pay no more than 10 percent of their monthly income in student loan payments. The measure, according to media reports, expands on a 2010 law that covered those who started borrowing after October 2007 and kept borrowing after 2011. The new order allows those who borrowed earlier to participate.
Now, almost three of every four college graduates leave college heavily in debt. As Paul Craig Roberts reported Tuesday, 260,000 college graduates were employed at or below the Federal minimum wage of $7.25 per hour as of March 31. The latest jobs report by the Bureau of Labor Statistics showed that job prospects for graduates were dismal.
In its phony statistics, the BLS claimed 217,000 jobs were created in May. Of those, most were in wholesale trade, retail clerks, transportation and warehousing, employment services and temporary help, wait staff and bartenders, and healthcare and social assistance, with healthcare and social assistance providing the most. These are not the jobs for which people go to school.
Almost 3 million people are graduating with either an associate’s degree or a bachelor’s degree this year. They are beginning to flood the market looking for work. And as they do, they’re saddled with an average of $30,000 in student-loan debt.
Most of those who graduated last year are either unemployed or underemployed. In other words, they’re holding a job that did not require a bachelor’s degree. Their prospects for a good job are akin to playing the lottery.
In May, there were 700 fewer jobs for lawyers over the previous month. There were only 4,100 new jobs for accountants or bookkeepers; 4,500 new architect and engineer jobs (a number that includes secretaries and office managers); 1,800 new jobs in management; and almost 12,000 fewer education jobs.
Government guaranteed loans made it possible for many who couldn’t otherwise afford it to attend prestigious universities. That influx of easy money from the government drove up the costs of tuition across the board, making it impossible for anyone but the very rich to afford college without first obtaining a student loan. As is usual in government meddling, it’s created a vicious cycle of easy money chasing higher prices.
But the result is students are saddled with burdensome debt — debt they cannot absolve themselves of through good-paying jobs or through bankruptcy. And now Obama’s policies are encouraging more students to take on more debt because they can now kick the payment down road. The policy simply creates more debt slaves.