Innovative approaches to debt relief
There is no denying that residents throughout the state of Florida are facing serious financial challenges. And while many struggle with unemployment and/or the prospect of bankruptcy, countless people in the state and across the country are losing their financial footing under the weight of mounting student loan debt. That is why one state is considering legislation that would confront the issue directly, essentially giving students a free ride through college on one important condition.
It’s estimated that Americans all around the country currently owe in excess of $1 trillion in student loans. To tackle the issue and provide some level of debt relief to students in their state, Michigan legislators will consider a bill aimed at eliminating factors like unmanageable student loan interest rates and debt. The bill would allow for the creation of a pilot program to put around 200 low-to-middle income students through college at the expense of $2 million.
Qualifying students that meet GPA and financial guidelines would be enrolled in the program for between 3 to 5 years depending on the level of higher education they apply for, and receive free college tuition. Following graduation and entrance into the workforce, program participants would then be required to pay back a fixed percentage of their income over a set period of time. Money paid back by participants would contribute to the fund and essentially allow them to avoid student loan interest rates in the process.
While the bill may have positive results if passed, some doubt whether or not students studying for some degrees associated with higher paying jobs will be willing to participate in the program.
Source: PBS, “Michigan plan promises to cover college tuition, but students must ‘pay it forward’,” Margaret Myers, March 19, 2014