Student Loans: U.S. Study Says College is Well Worth It

U.S. Treasury and Education officials have issued a study that says what many probably already know – a college degree will get you a higher income.
But the timing of the study is what truly counts as the Obama Administration is making a big push to get Congress to extend the low rate of 3.4 percent on federally subsidized Stafford loans before it is set to double on July 1.
Neither political party wants to be blamed for letting the interest rates double – and risk alienation of the college-age vote. But both sides have let politics take over instead of arriving at a compromise on how to pay for the $6 billion needed to extend the lower rate for another year.
The rate affects about 7.4 million college students.
There is substantial evidence that education raises earnings, according to the report from Treasury and Education Department officials released today.
The median weekly earnings for a full-time, full-year bachelor’s degree holder in 2011 was 64 percent higher than those for a high school graduate – $1,053 compared to $638.
The earnings differential grew steadily through the 1980s and 1990s.
“Recent evidence suggests that today’s earnings gap is the highest it has been since 1915, the earliest year for which there are estimates of the college wage gap,” reads a summary of the report.
The two largest components of federal financial aid are Pell Grants and Stafford loans.
The administration’s summary of the report also touts President Obama’s record on behalf of student borrowers. The Obama Administration has increased the maximum Pell Grant by more than $900 and provided support to more than 3 million additional students.
Stafford loans are part of the Federal student loan program for undergraduate and graduate students.
Forty-four percent of all Stafford loans are subsidized, meaning that students do not pay interest while in school.
View the full report here​.

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