When it comes to economic policies and government programs, it is the middle class that often gets the short end of the stick. After all, most of the aid programs are designed for people with lower incomes.
To solve this problem and help the middle class, one lawmaker, Rep. Mia Ackerman of Rhode Island, has drafted a new a bill aimed at forgiving the student loan debt of middle-income graduates.
Recognizing that student loan debt prevents middle-income people from buying a home or car, getting married and starting a family, launching a small business, and saving for retirement, Ackerman is focusing her legislation where it can have the most economic impact.
“This program would fulfill the need to educate our young people while making a sound economic investment in Rhode Island’s future,” said Ackerman in a recent press release announcing the new legislation.
Dubbed the “Get on Your Feet” program, state residents who graduate from a college or university and remain in the state won’t have to pay any of their student loans back for the first two years upon graduation. During those two years, the state will cover students’ monthly payments as long they are enrolled in the Pay As You Earn income-driven repayment program, which limits monthly payments to 10 percent of discretionary income.
In order to be eligible for the benefit, college students have to reside in Rhode Island and attend Rhode Island College, the University of Rhode Island, the Community College of Rhode Island, or the New England Institute of Technology. New England Tech was included in the program because Ackerman says the school offers high tech education, something that many Rhode Island companies are looking for their graduates to possess. Students must graduate on or after July 1 of 2018, stay in the state for at least two years after finishing school, and participate in the aforementioned PAYE repayment program. Borrowers also have to earn less than $50,000 a year while paying down their debt and must not enter deferment at any point.
“There is no better investment we can make in our state than the education of our residents, but, it is critical that we do this in a fiscally responsible manner,” said Ackerman, noting that her plan would be phased in over the course of the next three fiscal years.
While Ackerman isn’t the first lawmaker to devise a plan to help struggling borrowers pay back their student loan debt, she is among a few that are also tackling the problem of students pursuing degrees in fields that aren’t in demand. After all, going to college to eventually earn a law degree is an admirable choice, but if the state if flooded with attorneys, it won’t be easy to land a job and pay off debt.
As a result, Ackerman’s proposal also calls for the establishment of a so-called High-Needs Council that would work with industry in the state to come up with jobs and vocations that are needed in the state to boost its economy and stay competitive around the country. If a student in the “Get on Your Feet” program earns a degree in a high-needs field, but is being paid less than the average in that field, the council would let the borrower remain in the program past the two-year cutoff.
Author: Donna Fuscaldo
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