College degrees and their debt

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There’s no doubt students who decide to pursue higher education at one of the many universities and colleges throughout the United States are making a significant investment in their future, but a vast majority of them end up trading their cap and gown for a mountain of debt and uncertainty. In fact, 70 percent of American college graduates leave school with a “significant amount of loans,” which total nearly $1.5 trillion collectively, according to a 2018 CNBC report.
According to the same CNBC report, Americans are graduating with an average debt that’s comparable to a 10 percent down payment on a $370,000 home or the cost of a new Tesla Model 3. The average debt held by graduates is equivalent to roughly two-thirds of South Dakota’s median household income for an entire year.
I’m not suggesting that getting a college degree isn’t worth it, but I am saying that the debt it potentially creates can present a hurdle for many graduates and new job-seekers while many of them are finding out for the first time what life is like on their own – paying for rent, groceries and utilities, or maybe making a car payment, all while trying to ensure they have enough left over in their budget for their monthly student loan payments.
Students who graduate from American universities and colleges are a valuable commodity, which is why I recently introduced the bipartisan Employer Participation in Repayment Act with several of my Senate colleagues, including Sen. Mike Rounds, which would create a win-win scenario for graduates and employers, and it could also help incentivize job-seekers to keep their talent here in the United States.
I joined Sen. Mark Warner (D-Va.) in leading this effort that would give employers the option to participate in a program that would allow them to contribute up to $5,250 each year (tax-free) to help pay down an employee’s student loan debt. There’s an obvious benefit for graduates, but it also gives employers a new tool and benefit option to attract or retain top-level talent. If our bill became law, the employer could either make a payment directly to an employee or send it to a student loan lender, cutting out the middle man.
“Expanding employer education assistance helps address the skills gap, which is holding back both workers and employers. When employers are able to help workers pay off student debt, more people will have confidence to pursue higher education and be better prepared to fill high-skilled fields,” said Johnny C. Taylor Jr., president and CEO of the Society for Human Resource Management, which highlights the many layers of support our bill enjoys.
While passing this bipartisan legislation wouldn’t be a silver bullet with respect to the growing concerns over student loan debt and the rising cost of tuition in America, it would certainly help ease some of the pain.
Several of my Senate colleagues, including the chairman of the committee that oversees education, who also happened to lead the U.S. Department of Education in the 1990s, are working on some ideas to address the broader issue of lowering the overall cost of education. I stand ready to work with them to find fiscally responsible policies that can help graduates overcome this debt burden and enter the workforce in a stronger, more certain position.
—By Sen. John Thune