New parents in Pensylvania are being urged to avail of the $100-grant to supposedly jumpstart their babies’ college education.
“To every kid in Pennsylvania, no matter whether they live in a small town or a big city or on a farm or in a suburb, we’re saying to every kid, we believe in you, we depend on you, and we want you to start saving early,” said state treasurer Joe Torsella in a report.
Such effort has been received warmly as issues surrounding student debt continue to hound new graduates.
Bloomberg reported that it will take “borrowers many years or decades to pay off educational loans” because of the “modest wage gains.” The news report added that student debt has grown five times as fast as wages in the last decade.
“For many recent college graduates, loan payments are their second-largest expense behind rents and mortgage payments. Borrowers who graduated from 2012 to 2017 earn a monthly average after-tax income of $2,655, and about 15 percent of that goes toward student loan payments,” the Bloomberg report further added, citing data from a study of LendEDU.
A news report published by the CNBC revealed that over 44 million Americans have a total of $1.5 trillion student debt collectively.
“When they graduate, the average student loan borrower has $37,172 in student loans, a $20,000 increase from 13 years ago. With that money, borrowers could put a down payment on a home, purchase a new car or bootstrap their own business,” the report read.
In another CNBC report, parents are finding more ways to make ends meet as costs of higher education continue to soar in the US.
“Scholarships and grants covered a greater share of college costs, making up 35 percent of costs in 2016-2017. On average, scholarships and grants paid $8,390 of the expense. That’s up from $331 from the prior year. Nearly half of families use scholarships for college,” the report read.
Meanwhile, the Pensylvania treasury department said the $100-grant will be funded by existing surplus amount from their 529 programs as well as donations.