Pay As You Earn Plan Revised

On Wednesday, October 26^th President Obama introduced a new Pay As You Earn Plan to a group of Denver college students. This plan revamps the existing program by capping required payments for eligible college students at a lower percentage of their income and forgives student loans in twenty years.

Currently student loan debt is the second highest source of overall household debt. "Over the past three decades, the cost of college has nearly tripled," said Mr. Obama. "And that is forcing you, forcing students, to take out more loans and rack up more debt. Last year, graduates who took out loans left college owing an average of $24,000. Student loan debt has now surpassed credit card debt, for the first time ever. Living with that kind of debt means making some pretty tough choices when you're first starting out." President Obama also believes that the new plan will boost the economy by allowing previously indebted students to be allowed to purchase houses and spend more money.

The original Pay As You Earn Plan was 10% of discretionary income and loans forgiven at 25 years, so it seems that Obama’s plan is obviously a better deal for those of us who have student loan debt but it doesn’t change the plan by much. These numbers make the current outcry of concern by some political figures to be a little overstretched. Representative presidential candidate Michele Bachman was quoted saying that Obama’s new plan is an “abuse of power” and “it gives people an incentive to dodge debt.” Twenty years of repaying your student loan seems to be a far cry from dodging debt; rather this new plan would help people that are newly entering the workforce be able to pay their household bills and take care of home instead of having to worry about giving their entire paycheck up to student loans. Another cause of concern was the rising national debt and who would be responsible for the student loan debts if forgiven.

As previously stated, I think it seems trivial to think that five years and five percent will greatly impact our national debt. There is already a plan in effect that forgives student loans after 25 years, why not help out society and make it only 20? I think this plan is a great incentive for people to be able to finish their education without the fear of starving upon graduation when entering the workforce and it wouldn’t be that “we” aren’t repaying the loan; rather, it is income based and there is an annual documentation requirement so that any payment adjustments can be made according to your discretionary income.

With any new idea comes the possibilities of what ifs but the point is it’s time for a change and it’s about time that the government starts helping more Americans out financially that are in need so that we can all achieve the “American Dream.” In the end, isn’t that the point of higher education?

Democratic Blog Critiqued

Democrats will rally with public employees to push job bills is a blog posted by political writer, Joan McCarter on Daily Kos. McCarter blogs that President Obama’s $35 billion response to the threat of teacher, police and firefighter layoffs is “very smart positioning for the Democrats.”

These civil servants stand to be cut back due to lack of state funds. McCarter suggests that “Democrats are going all in behind the public employees who have been so vilified by Republicans throughout the country.” These workers have been invited to D.C. and a rally is currently underway. An obvious political writer for the Democratic Party, Joan McCarter blogs to her followers about the injustice of these employees and her distaste for Republicans concerning this issue is made very apparent.

McCarter’s argument is clear and sound, as well as justified. However, looking at this blog with a critical eye it is apparent that this piece lacks evidentiary support. We aren’t presented with much more than a small blurb about President Obama’s monetary proposition and some choice words about Republicans. This is a feel-good piece that is based off of Democratic emotion rather than hard supporting evidence. In the end however; I concur with McCarter in her conclusion that the funding to prevent these layoffs is a necessary expense. I would have liked to have more information about the history of this issue from both the Republican and Democratic perspective; however, she has portrayed herself as that “freedom fighter” type of woman, not someone I would be interested in following as I prefer to be educated and then have the argument unfold where I am allowed to either agree or disagree.