Digging a ditch of debt

Student loan debt now exceeds credit card debt as the nation's second largest form of debt, only being surpassed by home mortgages.


College is quickly becoming a growing expense for students. With high tuition rates, as well as the costs of books, dorm rooms, meals, and other living expenses in college, students are looking frantically for scholarships and loans to be able to afford an education needed to succeed later in life. Even the best and brightest often find themselves working out the math for the interest on the bank loans.

With the private sector pulling out of the market after seeing significant losses, the federal government is forced to step forward as the largest creditor of student loans. JPMorgan Chase, one of the oldest and largest banking firms in the nation, ceased its student loan program after no longer seeing "any meaningful growth in the private student lending market." 

While student loans differ depending on the creditor, most require payments to begin after the student graduates. This presents a problem, because as students are often searching for a job, a home, and are starting their new lives right after graduation. The loans create a burden on young adults, causing their circumstances to become critical, leading to even more debt and financial ruin.

This creates a paradoxical situation for students. Should they seek higher and higher levels of education to be able to pay off the student loans accumulated? Or seek lower level degrees, pay off the loans from those, then go back to school later in life?
It is ultimately up to the student to consider the value of the degree received against the cost of the loans required to pay for it. Remember, accumulated interest is added when calculating loan payments and overall cost. 

Where you go to college can also have an impact on student debt. Some colleges offer on campus work to keep cost down, and some states offer scholarship programs to help pay for residents who choose to go to in state college, such as the HOPE scholarship program in Georgia. Prestigious and higher ranked colleges have higher tuition rates. Prospective students going to higher level universities should weigh the amount payed against the quality of the education they will receive. 










http://articles.washingtonpost.com/2013-09-05/business/41798769_1_private-student-loans-federal-loans-flexible-repayment-plans

Minimum Wage Worries

"Millions of California's hourly workers will become among of the best paid in the country next year under a new minimum wage law enacted Wednesday." - Melanie Hicken, CNN Money.

"Washington already has the nation's highest state minimum wage at $9.19 an hour. Now, there's a push in Seattle, at least, to make it $15" - Donna Gordon Blankinship, Huffington Post

As teens, many of us find ourselves at the lowest levels of employment. Starting out with no past experience and an unfinished education makes it difficult, if not impossible, for our labor to be competitive in a job market where many adults have trouble finding employment. If a teen is lucky enough to have the time, and ability, for employment, they are usually rewarded with the lowest possible form of pay- minimum wage.

For several years, lawmakers have contemplated raising the minimum wage. Several states, most notably California and Washington, have taken progressive steps forward in this endeavor. In other states, however, minimum wage workers rely on the federally mandated $7.25 an hour.

(researched and published from The Washington Post)


President Obama recently made a proposal to raise the Federal minimum wage to $9. Other Democrats have proposed plans to raise it to $15 to cover inflation rates that have occurred since 1970, but this is unlikely to make any traction in the 113th congress, as it is controlled by Republicans in the House of Representatives.

Caroline Fairchild from The Huffington Post claims that the minimum wage "is still a far cry from what workers really deserve." She supports a raise to $21.72, citing a study by The Center for Economic and Policy Research that claims minimum wage has not stayed up to date with the rising cost of living, and economic inflation.

Others, such as Michael Saltsman from Forbes warn against raising minimum wage, as it would cause a higher rate of unemployment, less hours, which "leads to less take-home pay rather than more."
He argues against the point regarding inflation rates, claiming that because inflation rates rise and fall, "a minimum wage that truly kept up with inflation since its inception in 1938 would only be $4.12 today—not the current $7.25."

Most minimum wage workers tend to be young, unmarried, and still in school. They must face their first house and car payments, pay off their student loans, work to climb the corporate ladder, and study hard to succeed. While it would be a great boost to those who would keep their employment if the minimum wage was to rise, others would find themselves working less hours, or without any employment at all. This would create even greater income inequality among teens. The job market would become even more competitive, and that $7.25 sure would start looking appealing when you don't have a job at all.

So what do you think Woodland? What do you think the Federal Minimum Wage should be?











http://www.bls.gov/cps/minwage2012.htm

http://www.forbes.com/sites/realspin/2013/04/17/the-record-is-clear-minimum-wage-hikes-destroy-jobs/

http://www.huffingtonpost.com/2013/02/13/minimum-wage-productivity_n_2680639.html

http://money.cnn.com/2013/09/25/news/california-minimum-wage/index.html?iid=SF_E_River

http://www.huffingtonpost.com/2013/08/19/seattle-minimum-wage-campaign-washington_n_3778980.html