Student loans on a graduated scale
Commentator Robert Reich
KAI RYSSDAL: Private equity's plan to take over the world continued today. Bausch & Lomb's going to be bought by Warburg Pincus for $3.7 billion. It's the folks running those private-equity groups who get the really big paychecks.
But even entry level jobs right out of school come with sizeable salaries. Which makes paying down those college and graduate school loans all the more manageable.
Commentator Robert Reich thinks we ought to level the student-debt playing field.
ROBERT REICH: One of my former students who graduates from business school next week has already landed a job with a private-equity firm paying $240,000 next year, which I can tell you is a lot more than the salary of his former professor who's more than three decades older. My student tells me with a smile he'll be able to pay off his student debt way ahead of schedule. But that's not his real reason for taking the private-equity job. He wants to make gobs of money.
On the other hand, several of my students who will graduate next week tell me they would have liked to go into social work or into the nonprofit sector, or provide legal services to the poor. One had his heart set on becoming a painter. Another became passionate about archeology and had wanted to go on a dig in the Sahara. But they can't do any of these things because they have tens of thousands of dollars of debt. They need jobs that pay the rent while they repay their loans.
When they begin their university studies and take out college loans, most students don't know exactly where their interests lie. That's what college is all about — discovering what you want to do with your life. But America's increasing reliance on student loans to pay for higher education is directing millions of young people away from what they really want to do — from careers that could contribute a great deal to their communities and to the nation as a whole, but don't get them out from under their college loans.
So here's an idea: Make repayment of government-subsidized loans depend on how much money they earn. Say everyone has to pay 10 percent of their income for the first 10 years of their fulltime work. And then the loans are considered paid off.
My student who's landed that private-equity job would pay 10 percent of his income for 10 years, which would be a hefty sum. My students who go into social work or become artists would pay 10 percent of theirs, which would be far less. The private-equity guy would, in effect, subsidize the social worker and the artist. And why not? This way all of them could follow their callings.
RYSSDAL: Robert Reich used to work for President Clinton. He's got a job now teaching public policy at the University of California Berkeley.