3) The government is proposing a new program to encourage college students to go into government jobs (teaching and service). The program will help cover the cost of college if you work in the government. With th college loans for 10 years, regardless of what you owed. Unfortunately, government salaries are generally lower than those in private industry and pay does not grow as fast. e new program, you would only need to pay back Base salary government job: $65,000/yr starting after graduation Base salary private industry job: $80,000/yr starting after graduation Inflation: 3.5% annually Government salary growth: 0.7% over inflation annually Private salary growth: 1.1% over inflation annually Living expenses: $25,500/y starting after graduation (inflate after that) . * Loan interest rate: 2.5% annually * Annual loan payments: 28% of (salary minus cost of living) . Years before loan forgiveness, government job: 10 .Years before loan forgiveness, private job: 18 Cost of college S50,000 per year for each of four years (no inflation) Discount rate: 6% Assume that you are a freshman entering college and that once you start in government or industry, you stay there for 35 years. Should you consider the new government program? 3) The government is proposing a new program to encourage college students to go into government jobs (teaching and service). The program will help cover the cost of college if you work in the government. With th college loans for 10 years, regardless of what you owed. Unfortunately, government salaries are generally lower than those in private industry and pay does not grow as fast. e new program, you would only need to pay back Base salary government job: $65,000/yr starting after graduation Base salary private industry job: $80,000/yr starting after graduation Inflation: 3.5% annually Government salary growth: 0.7% over inflation annually Private salary growth: 1.1% over inflation annually Living expenses: $25,500/y starting after graduation (inflate after that) . * Loan interest rate: 2.5% annually * Annual loan payments: 28% of (salary minus cost of living) . Years before loan forgiveness, government job: 10 .Years before loan forgiveness, private job: 18 Cost of college S50,000 per year for each of four years (no inflation) Discount rate: 6% Assume that you are a freshman entering college and that once you start in government or industry, you stay there for 35 years. Should you consider the new government program