On Friday, the Bureau of Labor Statistics released their monthly jobs report, which estimated that 80,000 new non-farm jobs were created during October, and that the unemployment rate decreased very slightly to 9.0 percent. (more…)
A conference call with reporters today revealed more details about the Obama administration’s plan to roll out a program for student debt relief.
Education Secretary Arne Duncan Duncan, Director of the White House Domestic Policy Council Melody Barnes and Raj Date, Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau (CFBP) told reporters today’s White House proposal is casting a wide net to help more debt holders.
A fact sheet provided to reporters indicates the White House expects college loan holders to save “hundreds” of dollars per month through this relief package. During the call, Duncan said a nurse earning $45,000 a year with $60,000 in loans can expect a $451 reduction in monthly payments.
A summary of the college payment relief programs:
· Starting in January of next year, allow individuals to consolidate their Federal Direct loans with subsidized loans. The White House says this move can tack off half a percentage point in the interest debtors pay. Barnes told reporters submitting payments to two different loan services increases the risk of default.
· Expanding the IBR program through a pay as you earn service that caps the discretionary income considered to 10 percent that will also go into effect January of next year. While the president had Congress approve a similar IBR measure that lowers the percentage of income considered, that rule won’t go into effect until 2014. White House numbers project the move will help 1.6 million student borrowers. Today’s proposal also excuses all unpaid debt after 20 years of successful minimum payments, rather than the 25 years originally legislated. Discretionary income is calculated by subtracting150 percent of the poverty line from a person’s adjusted gross income–that dollar figure at the end of one’s tax return.
· The CFBP, less than 100 days old an a product of last year’s big bank regulation law known as Dodd-Frank, is in the finishing stages of a simple Financial Aid Shopping Sheet, which would de-jargon the language on college award letter and scholarship documents. “The form would also make the total costs — and risks — of the student loans clear before they enroll by outlining their total estimated student loan debt, monthly loan payments after graduation and additional costs not covered by federal aid,” indicates a White House press release.
Tackling student debt is part of the administration’s larger effort to circumvent policy changes that need Congressional approval. “We simply can’t wait for Congressional Republicans to act,” said Duncan.
While Congress in 2009 approved a measure called Income Based Repayment, which went into effect last year, only 450,000 college loan holders have signed on out of the over 30 million Americans juggling higher education debt. That program caps the amount college debt holders pay on federally-backed loans to 15 percent of their discretionary income.
Perhaps coincidentally, College Board released a report today showing college tuition and fees rose this year by more than 8 percent from last year for public four- and two-year colleges. Still, more students are entering college, the report noted, as an additional 2.8 million students enrolled in school between 2007 and 2010.
Higher education has been under a microscope as job prospects are low for many and additional education is sought after. The swell of new students is forcing campuses to find new revenue streams to keep up with services, often resulting in seeking out students who pay higher tuition. The trend is most visible at public universities that have set their sights on out-of-state candidates who pay considerably more than local students — at times three times as much.
Taking into account a student’s ability to weather the financial burden of higher education is an increasingly ethical dilemma. Student default rates, as determined by the two-year cohort rate calculated by the U.S. Department of Education, is at a 12-year high, with 8.8 percent of graduates not paying their college loans for 270 days or more. Using a more comprehensive metric, a report issued (PDF) by the New America Foundation found that 15 percent of graduates defaulted, while 21 percent were delinquent on their payments.
But despite the costs and risks of falling behind in payments, arguments college is still worth it abound.
Individuals possessing a college-equivalent degree can expect to earn 80 percent more than a person with a high school degree. In an earlier study from researchers at Georgetown University, a college degree holder can expect to make $1.4 million more than one witha high school degree. And owning a college degree goes a long way to having a job: while the unemployment rate in this country is 9.1 percent, only 4.3 percent of college degree holders are jobless.
September’s job numbers indicate the unemployment rate remained steady at 9.1 percent, and that nearly half (44 percent) of the 14 million looking for work have been jobless for 27 weeks or longer.
103,000 jobs were created since August, buoyed by a work resolution between the Communications Workers of American and Verizon that brought 45,000 workers back on company rolls.
Part-time employees increasingly say they cannot find additional work because of the economy. 9.27 million workers find themselves unable to arrange more hours, compared to 8.8 million in August.
Speaking this morning on MSNBC’s The Daily Rundown, Mark Zandi, chief economist at Moody’s Analytics, said, “If Congress and the administration do nothing… the odds are rally high were going into recession next year.”
26,000 construction jobs were added in September, a reversal in the trend that saw the industry remain flat since February. Government payrolls continue to be pared down; 34,000 state, local, and federal jobs were lost in September.
Also from the Bureau of Labor Statistics summary:
Since April, payroll employment has increased by an average of 72,000 per month, compared with an average of 161,000 for the prior 7 months. In September, job gains occurred in professional and business services, health care, and construction. Government employment continued to trend down.
Employment in professional and business services increased by 48,000 over the month and has grown by 897,000 since a recent low in September 2009. Employment in temporary help services edged up in September; this industry has added 53,000 jobs over the past three months. In September, employment growth continued in computer systems design and in management and technical consulting services.
Persons with a college degree have by far the lowest unemployment figures—4.2 percent.
And the rate along race and gender lines is as follows:
Among the major worker groups, the unemployment rates for adult men (8.8 percent), adult women (8.1 percent), teenagers (24.6 percent), whites (8.0 percent), blacks (16.0 percent), and Hispanics (11.3 percent) showed little or no change in September.
In May, BLS released a study estimating the length of time a job seeker looks for work before giving up on finding an employer.
Before the economic downturn, finding a job took an average five weeks. But after between eight to ten weeks of not finding a job, the person exited the labor force. The corresponding numbers are now ten weeks and 20 weeks respectively, according to the most recent data from December of last year.
In August, President Obama announced a $447 billion jobs package that has met GOP resistance. If passed, it would exceed the per-year price tag of his 2009 stimulus bill. Confronted with considerable push-back against the legislation in from the GOP, the president has embarked on a road tour across the country promoting his plan.
The U.S. economy gained 117,000 jobs in the month of July, a net increase driven entirely by the private sector. About 154,000 private sector jobs were created in July, even as 37,000 government jobs were lost due to state and local government budget cuts. (more…)
This morning’s jobs report from the Bureau of Labor Statistics contained much bad news. Despite some promising signs that the economy is improving the national unemployment rate jumped from 9.6 to 9.8 percent.
Non-farm employment increased by only 39,000 jobs, not nearly enough to cover the increase of new workers through population growth. Perhaps most oddly, retail jobs shrunk at a time when retailers should be gearing up for Christmas sales.
The number of workers who had been unemployed for more than 27 weeks — the long-term unemployed — stayed steady at 6.3 million, accounting for nearly 42 percent of all jobless workers. Nine million workers were in involuntary part-time jobs because they could not find full time work; these are referred to as underemployed.
An additional 3.8 million workers were counted as “marginally attached to the labor force” or “discouraged workers” because they had given up looking for jobs after long searches, believing that there were no jobs available to them. Those workers are not counted in the unemployment statistics, which would obviously be far higher if they were.
This bad news comes as the White House and the Democrats are trying to pass an extension of federal unemployment benefits over the objections of Republicans, who demand that the cost of those benefits be offset by budget cuts so they won’t increase the deficit.
At the same time, they also demand that tax cuts for the richest 2 percent of Americans be continued, which would add $700 billion to the deficit, without any demand for offsetting that cost.