Ready to use out of 3 proposals to solve the student loan dilemma

The figures are staggering. In the US student loan debt now stands at $ 1.1 trillion, nearly 15% of the loan default rate of the current three years to start repayment of the range. However, the recent concerns about the crisis on the mortgage collapse magnitude seems exaggerated, and hook two fifths of the borrower does not exceed $ 10,000. What is frightening is that the economic difficulties that you do not need excessive loans face. Maximum speed of late payment of less than $ 5,000 in outstanding loans to borrowers Beth Akers, Brookings Institution researchers said. Clearly, the current system of funding universities in need of repair, if not thorough overhaul. To learn how to borrow wisely, see the right way to borrow College. Ready-made three recommendations to address STU dent loan market in the long run, read the


1. Simplify repayment. Replace existing single option to repay federal loans, based on a series of dazzling Daniel Kreisman professor of economics at Georgia State University’s planned revenue, he said. After graduating from college, the borrower will automatically be included in the plan. Your boss will be deducted from your salary towards a small part of the debt application (you can check the box on your W-4 form, if you have a loan repayment), beginning on the first $ 10,000 of income of 3%, as earnings rise increases, the upper limit of 10%. The interest rate will fluctuate with market interest rates, and when to pay off the loan or 25 years, your donation will be stopped. You can pledged to repay the loan faster

shortcomings in your W-4: The plan may extend the typical 10-year payback period, increase the amount of interest payments

2. Skin in the game to college. The school has been unable to access federal student aid if default rates soaring. But some experts want to pay as much as institutions, non-performing loans losses occurred in 20% of their school. “Lenders need all the risks. Students have to pay duty, but only to get college money,” says financial scholar Alex Pollock of the American Enterprise Institute. The risk-sharing more responsibility for schools to maintain high academic standards, and to ensure student success

disadvantages: School serving the high-risk groups may be unfairly penalize

3. Investors pay. Revenue – sharing agreement, or international auditing standardsThen, give investors a fixed period of time to win a share of future earnings of students rights. Agreement is tailor-made; clauses may be more favorable than in the top engineering programs in the lower levels of school students in the humanities majors. Lest you think that all the money will go to Harvard financiers, that the employer has a relationship you would expect, for example, well-funded, community colleges areas and strong professional bent. The beauty of this is that the human capital market, it reminds prospective students, high-quality, low-cost program, a finance professor at Vanderbilt Miguel Palacios, one of the founders of Lumni, few enterprises for such a transaction, he said. Uncertainty about the International Searching Authority supervision is their biggest obstacle

disadvantages: 1062 research compiled a social value, but not necessarily to make money may be difficult to dig ISA market.