The American Constitution is now a thing of the past. Gone is the tripartite government, the checks and balances, the protections of our liberties. President Obama announced last week that if Congress would not pass his $447 billion jobs bill, he would take matters into his own hands. By executive order, he has proceeded through some of the key components of his program already. Perhaps the most crucial of these for our generation is his newly-unveiled student-debt program.
Most of us will graduate with at least $10,000 of student-loan debt. And with nationwide college tuition on an annual average 7 percent increase, most American college students will owe at least that amount. Some students owe upwards of $200,000, which they borrowed to attend schools like Bates College ($51,300 annual tuition) in the hope of entering a high-paying income bracket post-graduation. Alas, with 23 percent unemployment for Americans age 18 to 25, many of these indebted students have only sunk deeper into red ink after receiving their expensive diplomas.
The new, executive-initiated student-loan program seeks to alleviate some of the stress on our college-age demographic by lowering interest rates, reducing the factor of income-based repayment calculation from 15 percent to 10 percent, and putting in place a loan-forgiveness threshold of 20 years instead of the current 25.
Not surprisingly, students who attended Obama’s Auraria Higher Education speech, which announced this new student debt program, expressed resounding support. As a debtor myself, I think it sounds pretty great. My future does “need a boost right now,” and perhaps executive orders really are needed to bypass the incompetencies of the current ultra-partisan Congress.
But not so fast.
Complications arise and skeptics become the opposition, when we look to the actual mechanics of this plan. In fact, higher education analyst Alisa Cunningham criticized this new “pay as you earn” program, saying that the biggest downfall of the plan is its ambiguity. Cunningham explained that the plan operates relative to each student’s unique circumstance. There is no fixed or arithmetic means of calculating “circumstantial” payments, so no one really knows how much this new plan could affect each of us. Time will tell. Meanwhile, I would refrain from the naive optimism that this new executive order will solve all of our anxieties about graduating from a liberal arts institution with more debt than we could pay off in the next several decades.