Student loan burden hinders VA employees

Last month I wrote about Veterans Affairs Secretary Bob McDonald’s plans to bring more medical doctors and other health professionals into the VA system. One of the items in his broad outlook includes the government expanding its student loan repayment program.

The burden of a student loan has a reputation of dragging down a person’s credit and taking years to pay off while cutting into everyday life. Home purchases, car payments and the cost of raising children become more difficult when student loan payments are figured into a monthly budget.

I looked into how student loans can expand one’s financial difficulties, and how such debt may be hurting the economy.

According to estimates from California-based John Burns Real Estate Consulting, there are 414,000 homes that are worth $83 billion that will not be purchased this year because so many potential homebuyers younger than the age of 40 are smothered with student debt. There are no numbers available for older individuals, but some experts agree that if student borrowers older than 40 were investigated, many more homes and much higher dollar figures would come up.

Adding to the large amount of debt, most student loans cannot be refinanced, according to author Barbara Garson, who wrote “Down the Up Escalator: How the 99% Live.” So loans that were granted several years ago at higher interest rates are still being paid at those higher rates.

Garson also writes that student loans are exempt from many truth-in-lending laws, leaving recipients open to falling prey to legal, if questionable, loan repayment schemes.

On the plus side, independent writer Liz Weston, in a recent “Money Talk” column, stated that student loans are advantageous because they are fixed-rate, the interest is tax deductible and in the face of “economic difficulty” payments can be suspended without damaging credit scores. (No wonder so many student loans are left on the table!)

Earlier this month McDonald added another wrinkle to the employment plans of VA medical center workers. He ordered top leadership to delay grade reductions for 17 targeted union positions for at least another 15 months to allow for completion of a review.

And he allowed VA leaders to reverse recent hiring practices that brought in new employees at lower salaries, which meant they would work alongside others making more money but doing the same jobs involving direct services to veterans.

Donation stations

Two weeks ago in Las Vegas, Mayor Carolyn Goodman dedicated the city’s latest donation station to raise funds for the homeless. It’s in front of the celebrated Mob Museum. The mayor was kind enough to acknowledge that I was the individual who initially brought the idea to the city. Donation station? Please allow me to explain.

Six years ago I was a reporter covering Barack Obama at the Democratic National Convention in Denver. While walking around the city I noticed what looked like parking meters in strange locations — in the middle of sidewalks, in parks, on pedestrian stairways and other spots where no automobiles were allowed or could even enter. On closer inspection I learned that they were vintage refurbished parking meters that were placed into service to collect donations to help less fortunate individuals.

I was impressed, and when I returned to Las Vegas I set up a meeting with then-Mayor Oscar Goodman and presented the idea to him. I suggested that Las Vegas set up meters to raise money for homeless veterans. Pedestrians walking by would be encouraged by signage to deposit pocket change without being approached by an individual.

Goodman took to the idea immediately, but advised me that the city could not discriminate, so the funds would have to go to help all the homeless, not just veterans. I agreed, and he began to stir the city into action.

Some months later the first donation station was installed, and since then 13 have been planted around Las Vegas. The current Mayor Carolyn Goodman has latched onto the plan, dedicating new locations and embracing the latest one with a large personal donation of her own.

Now I’d like to challenge every city in Nevada … Carson, Reno, Pahrump, Henderson, Searchlight, North Las Vegas, Boulder City … how about all of the city fathers and mothers of those worthy cities (and the other cities I did not mention) set up their own donation station programs? It’s a way to help homeless veterans and others, and the government cost is minimal.

Journalist and author Chuck N. Baker is an Army veteran of the Vietnam War and a recipient of the Purple Heart. He can be heard each Thursday from 8-9 p.m. on “The Veterans Reporter Radio Show” on KLAV 1230 AM.