Business View Magazine | September 2019

11 BUSINESS VIEW MAGAZINE SEPTEMBER 2019 THE NEW CENTER REVEALS PLAN TO ALLEVIATE THE STUDENT DEBT CRISIS Although the student debt crisis is front and center in the 2020 presidential debate—with plenty of plans to dig students out of debt—there has been shockingly little discussion as to why college is so expensive in the first place. Today, The New Center—an organization focused on creating the space for a political center in today’s America—released a new policy paper entitled “The New American Dream: Alleviating the Student Debt Crisis,” with a comprehensive set of solutions to help students in debt now and to make college more affordable in the future. Higher education has never been more important for Americans looking to get a good job. In 2018, college graduates earned weekly wages that were 80% higher than those of high school graduates. The U.S. is home to some of the best colleges and universities in the world, but the cost of attending them is burdening students and their families as never before. Increasingly, young people are pushing back many milestones of adulthood—like starting a family or buying a home—because they are buried under mountains of student debt. The New Center Paper proposes several ideas to deal with both the burdens of student debt and the excessive cost of higher education. How Should We Deal with College Debt Now? 1. Income-Based Repayment Plans Need to be the National Standard Today, some borrowers participate in the income-based Revised Pay as You Earn (REPAYE) plan, in which borrowers pay 10% of their discretionary income for 20 years. REPAYE should be the default repayment plan, and the Department of Education should immediately convert all borrowers to it. Most high school students aren’t financially literate and do not understand what a loan will mean for their long-term economic security. OPENING L INES