limited employment opportunities face considerably higher
monthly payments.
Nine percent of borrowers
with student loans owe between
$50,000 and $100,000, and 3.7%
ing the student’s skills to benefit
an area in need.
Some employers also offer
student loan forgiveness ben-
efits after a certain length of
service has been attained in ad-
the debt and skills-mismatch
problems.
“Credit unions can
take additional steps
to ensure healthy
loan performance by
counseling members
with student loan debt
on how to best manage
their credit.”
Third, there are great shortages of certain skills in the
workforce. One way to increase
supply of workers with these
in-demand skills is the concept
of loan forgiveness tied to public service. Those who graduate with a certain degree such
as a teacher’s certification or a
medical degree can gain special compensation by serving in
designated communities for a
“Recent regulations regarding ability to pay have
made it very challenging for individuals under the age
of 21 to open credit in their own name if they are not
employed.”
of borrowers owe more than
$100,000. Their fully amortized
payments often exceed $500 or
even $1,000 per month, often
unaffordable for someone starting out in their career, while unemployed college graduates leveraging deferment periods see
their loan balances grow due to
accruing interest.
Policy discussions around
how to improve the perfor-
mance of student loans have
suggested that altering the
amortization schedule of the
loans might help, with near-in-
terest-only payments early on
and accelerating principle pay-
ments as the borrower’s career
matures.
There is a radical
change in the
longstanding belief
that going to college,
regardless of major,
will prepare a young
person for greater
career success. In
reality, the market does
not treat all majors
equally and students
are finally taking notice.
Some majors supply
graduates at a level
that exceeds market
demand
set amount of time. The public
service is then used to forgive
part or all of the debt while us-
dition to tuition reimbursement
benefits that they may offer
employees currently enrolled
in part-time college training.
While these debt forgiveness
benefits are not widely offered,
they can give an employer an
edge in not only recruiting top
talent, but also retaining it.
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