Young Invincibles’ Statement on the President’s Budget
[WASHINGTON, DC] The White House released The President’s Fiscal Year 2014 Budget this morning, causing concern for student loan borrowers, but fueling optimism for 4.1 million unemployed Millennials, ages 18 to 29.
The White House’s proposal includes a number of provisions that will help put young Americans back to work including: $12.5 billion for the Pathways Back to Work fund that supports seasonal and year-round employment for low-income young people, and $8 billion for the Community College to Career Fund to facilitate partnerships between community colleges and businesses. Moreover, the President proposes to replace sequestration, ending across the board cuts that have reduced investments in anything from job training for young people to student aid.
The budget would reform the formula for campus based aid programs like Federal Perkins loans to encourage schools to deliver more need based aid and graduate greater numbers of low-income students. Borrowers would also see some relief in the form of expanded eligibility for the Pay as You Earn initiative that would allow more people to limit monthly student loan payments to 10 percent of their discretionary income.
Despite the positive steps, the Administration includes a reform to student loan interest rates that would keeps rates low in the near term, but risk sky-high interest rates in the long term. The structure of the proposal switches student loan interest rates from a fixed rate to a rate that varies with the market, allowing students to take advantage of temporarily low rates, but offering no protection for students when rates inevitably begin to climb. Without a cap, this proposal falls far short of the comprehensive reform to student loans that we need.
Rory O’Sullivan, Policy and Research Director at Young Invincibles said, “With over 4 million unemployed Millennials, we applaud the President’s initiatives that would train young Americans for the 21st century economy. At the same time, we are disappointed to see a student loan interest rate that trades lower rates now for higher interest rates in the future. We hope to work with the Administration in the months ahead on a long term solution to student loan interest rates that would include protections like an interest rate cap.”
Young Invincibles is a national organization committed to amplifying the voices of young Americans, aged 18 to 34, and expanding economic opportunity for our generation. Young Invincibles ensures that young Americans are represented in today’s most pressing societal debates through cutting-edge policy research and analysis and innovative campaigns designed to educate, inform and mobilize our generation to change the status quo.