Let’s say you come from a middle-class family. You had seen all the statistics that said those without a college degree were pretty much consigning themselves to a lifetime of near-poverty, so you were determined to get an education.
Your parents did OK, but they weren’t wealthy enough to pay for your tuition and other expenses, so you took out sizable loans, figuring that your strategy would pay off in the long run.
Then you graduated into an economy where jobs — particularly those connected to your degree — were scarce. Six months after you wore your cap and gown, those loans started to come due.
Those who borrowed through the federal government after 2007 got some relief from programs created by Congress and President Barack Obama. Those students have had to pay no more than 15 percent of their income each month, and that is going down to 10 percent in July.
But what about those former college students who took out loans before 2007? Shouldn’t they get the same break?
Obama says they should. On Monday, he signed a presidential memorandum that will allow those who borrowed through the federal government before 2007 to get the same deal as later borrowers. In addition, if loan payments are made regularly, any remaining balance is forgiven after 20 years, or 10 years if the ex-student is working in public service.
A Pew Research Center study in May revealed that households headed by someone younger than 40 who took out student loans have an average of more than $137,000 in overall debt, including credit cards.
Outstanding federal student loan debt is more than $1 trillion, according to the Congressional Budget Office. Experts say it is a major drain on the overall economy. Many people with high student loans can’t afford to buy houses, have families and start small businesses.