Student loan debate lacks proportion

Let’s review some facts on student loans. The current interest rate is 3.4 percent. The rate is set to increase to 6.8 percent. The average student loan debt is $25,000. Loan repayment period for this debt level is up to 10 years. Loans over $30,000 can be paid off over 25 years. Students who are working but face hardship or illness can apply for a temporary adjustment to payments and terms. This information and payment calculators are found at the www.studentaid.ed.gov.

Assuming a student finds a job, salaries start around $36,000 and go up. Most students would be happy to earn $5,000 per year while going to school. If they earn $36,000, they increase their revenue by $31,000 per year. Under the current interest rate, with a $25,000 loan, their loan payment would be $246.05/month or could be as low as $158.97/month. If they owe over $30,000, the payment could be extended for 25 years.

If rates are allowed to go to 6.8 percent, the new payments will increase. For the student making the highest payment in our illustration, that means a new payment of $287.70/month. Their annual loan cost goes from $2,952.60 to $3,452.40. That’s a dollar increase of $499.80/year, $41.65/mo. The college grad still retains over $27,000 of revenue with which to pay their other bills.

While no one likes to pay more for anything, the real world is full of unpleasant financial realities. This one, based on the figures presented, seems to fall in the “pay the bill and move on category” and is not the pending financial crisis that our current administration and media would have you believe. Our elected officials should focus on the more serious social and economic issues that are wreaking havoc in our society.

Peter Gennuso

Schaumburg