The end of August is traditionally a time when parents go back-to-school shopping to purchase new supplies for the start of the school year in September. And while the cost of a new backpack, or new clothes and sneakers, can be quite expensive, it pales in comparison to the 5-digit tuition bills parents receive who are sending older children off to college...
For these students, they are seeking higher levels of education to hopefully set themselves up for future success. Yet, we all know it is becoming increasingly more expensive to attend college, with higher education costs rising and student loans leading to crushing and burdensome debt.
If you are wealthy, you might feel the pinch of the tuition bill, while the middle class finds itself struggling to bear its weight. And for those less fortunate economically, it can spell the difference between attending higher education and taking a pass.
College affordability and student loans are serious issues that affect millions of Americans. According to a 2018 Federal Reserve Bank of New York report, as many as 44.7 million Americans have student loan debt. The total amount of student loan debt was $1.47 trillion by the end of 2018 — more than credit cards or auto loans.
It is clear that student loans are hampering the financial future of more Americans than ever before. Consider this from studentloanhero.org:
“Among the Class of 2018, 69% of college students took out student loans, and they graduated with an average debt of $29,800, including both private and federal debt. Meanwhile, 14% of their parents took out an average of $35,600 in federal Parent PLUS loans.”
It’s time to slow down the boulder of crushing educational costs. We must do something that will stymie these increases and to provide students with a smoother financial path.
I have introduced several bills that address these issues head on. They include:
Senate Bill, No. 4012. Prohibiting administrative fees. The Higher Education Student Assistance Authority is authorized to “establish and collect” certain fees from borrowers under the New Jersey College Loans to Assist State Students Loan program. As I’m fond of saying, this legislation is not a giveaway. We support and expect students to pay their student loan. But we should also not penalize them financially with added costs. I would add that we always encourage young people to obtain the best education possible. These students are taking out loans to fulfill their career hopes and dreams. I don’t believe that we should punish them for their initiative. And I also believe that removing these fees is a demonstration of our support and encouragement.
Senate Bill, No. 1922. This bill allows for gross income tax deduction for amounts paid by employers for certain educational assistance programs that link to employees and their student loans. This program makes good business sense for employers, and at its essence, it is an incentive to encourage employers to provide “financial wellness,” and a benefit to employees without raising taxable salaries or wages. As I note in my legislation, “These forms of tax-free assistance can aid employees in meeting their current costs of pursuing their higher education goals while they hold a job and can also help to address high student debt facing the college-education workforce.”
If you’re wondering whether these seemingly incremental, positive attempts really help students, rest assured that they do. Just like a small change in your daily regimen for better health can make a difference, I believe the same holds true for a person’s fiscal regimen.
Many students and their parents are thinking about education costs at this very moment. The beginning of the academic year is around the corner, and millions of American students will face academic, social and personal challenges. They will also confront financial roadblocks. Doesn’t it make sense to help reduce the financial obstructions they will face?
That’s my take, what’s yours?