"With the wonderful College, University and other Graduations taking place all over the USA, there has never been a better time than now to graduate. Best jobs market ever, great housing and financing. Go out there, work hard, & have a GREAT life. You deserve it. Congratulations!," he tweeted on Sunday.
But that sentiment was overshadowed by the startling announcement by billionaire investor Robert F. Smith, the wealthiest black man in America, that he would pay off the student loans of the Class of 2019 at Morehouse College.
"On behalf of the eight generations of my family who have been in this country, we're going to put a little fuel in your bus," he said during his commencement speech Sunday at the historically black college in Atlanta.
The gift was greeted with shock by students, who talked about the sacrifices their families had made to put them through school -- and about the relief they felt at having the burden of tens of thousands of dollars in debt instantly lifted.
Smith's effort underscored the stark economic disconnect for younger Americans who are graduating into a strong job market but have little sense of financial security.
The unemployment rate fell to 3.6% in April, the lowest level since December 1969. Wages are finally rising -- particularly for those at the bottom of the income ladder -- after years of stagnation.
The unemployment rate for college grads is even lower, coming in at 2.1% in April. That's roughly where is been since late 2017.
But starting salaries are virtually flat from last year, despite the low unemployment rate, according to a study released last week by Korn Ferry, a consulting firm.
2019 college graduates will make an average of $51,350 a year, only about 2% more than those who got their degrees in 2018, the study found. With inflation hovering around 2%, it means the wages are essentially the same as a year ago.
The firm analyzed 310,000 entry-level positions at nearly 1,000 organizations -- mainly larger companies -- nationwide.
Student debt also weighs heavily on college graduates, which is causing many to put off buying homes and starting families.
Outstanding student loan debt reached $1.49 trillion in the first quarter of 2019, up $29 billion from the end of last year, according to the Federal Reserve Bank of New York.
This burden has more than doubled in inflation-adjusted terms in the last decade, a Federal Reserve Bank study released in January found. The average debt per person for those ages 24 to 32 rose to $10,000 in 2014, up from $5,000 in 2005.
Some 20% of the overall decline in home ownership among the young can be attributed to ballooning student debt, according to the report. More than 400,000 young people would have owned a home in 2014 had it not been for their increased loan burden.
That reality was reflected in Morehouse President David Thomas' response to Smith's donation. Thomas told CNN on Monday that Smith's gesture is "a liberation gift."
"When you have to service debt, the choices about what you can go do in the world are constrained," he said. "(Smith's gift) gives them the liberty to follow their dreams, their passions."
Bagikan Berita Ini
0 Response to "Morehouse gift shows reality of college debt outweighs Trump's positive economic message"
Post a Comment