The Examiner
William Heuisler
Tuesday, President Obama announced Improved Income-Based Repayment (IBR), a plan to allow student tuition-loan borrowers to cap their monthly payments at 10% of their discretionary income as soon as 2012. The new government policy supposedly saves students lots of money. Bottom line? Income adjusted deferred repayments will stretch schedules beyond the reasonable capacity of conventional lenders to carry the debt.
Imagine car dealers saying, "Take the new car. Pay when you can afford to."
And who underwrites these generous policies? US Taxpayers, of course.
Over 20 years, college tuition has increased twice as fast as the cost of living. Student debt grew from under $200 billion eleven years ago to more than $1 trillion this year. Average student debt is $23,000 (up 8 % from 2010). Students owe more to colleges than everybody owes credit card companies. From 2005 to 2008, college tuition increased four times faster than the Consumer Price Index. In 2011 college tuition increased almost 8 % in all US State Colleges. (Lewin, 2008)
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