The cost of higher education has gotten a heck of a lot higher in recent years. I have witnessed this phenomenon first hand in the decade that separates my oldest and youngest entering college. Even a willingness to take on large amounts of student debt is no longer a guarantee of future earnings. Our present system of financing for higher education is definitely broken and affordable college an oxymoron. Still, hope remains. The session I attended last week on this topic was packed, and had a large proportion of students. Here are my notes.
Robert Shireman. fomer director of Institute for College Access and Success and a Deputy Undersecretary of Education.
Carmen Berkley of the US Student Association, “the oldest national student-led organization dedicated to students' interests.“ She made the point that students are in a much better position to ask for student debt relief, after the huge youth GOTV (get out the vote) effort last November. Rev. Jackson said the same thing, in terms of progressive voters. In fact, panelists and participants alike echoed the leit motif of this conference: The Obama victory was only the beginning. Now, the hard work begins.
Rev. Jackson opened his remarks by asking how many people in the room had student loans. Many hands went up. Just how much ranged from a “low” of $8,000 to over $150,000 for a bachelor's and graduate degree. Panel member Carmen Berkley, head of the USSA, is herself saddled with $80,000 of debt; her monthly payments are over $900.
The moderator pointed that, until two years ago, President and Michelle Obama had substantial student loans. Were it not for Obama’s two recent best-sellers, the First Couple would have entered the White House with their student loans trailing behind them.
Jesse Jackson characterized the present set-up as “guaranteed debt without guaranteed jobs” and claims that the government is “scalping” student loans. Why, he asked, do students get less advantageous interest rates than the banks, which pay less than 1%? The economic stimulus must be applied from the bottom up - starting with homeowners and students. The present corporate bailout, on the other hand, doling out billions to AIG, banks, and brokerage houses, is definitely a top-down system.
Simply put, private lenders are making way too much money on young students, at the bottom of the economic food chain. We must pressure universities, lenders, and our elected officials to change the present situation.
Realities of Higher Education and their Ramifications
Two out of every three students pay for college by borrowing. More people are borrowing, and they are borrowing more, to keep up with escalating tuition costs. The neediest students end up borrowing at the highest interest rates, in a kind of education redlining.
This is bad news for our country. In the last three decades, state school tuitions have tripled while earnings sagged, further discouraging potential students from taking on large debt. It’s a tremendous waste of human resources when higher education is out of reach for so many of our citizens. Student debt shackles a large portion of those just entering the job market, making it impossible to ever get out from under the loans in order to buy a house, a car, or even less expensive consumer goods.
The decrease in the number of college students and graduates is also detrimental to our competitiveness on the international market. In the ‘50s and ‘60s, public policy was directed towards achieving greater rates of college attendance. We were #1 in the world in this regard; largely because prospective students could pay for 3/4 of their education through federal grants. Today, the US is not even in the top ten, world-wide. Quite a come-down and not a good portent of what lies ahead.
Panelists and attendees alike supported increasing Pell grants and making them an entitlement, like Social Security. Another goal is for the government to set student loans at the same preferable rate that banks get. Private lenders making out like bandits with their extortionate rates should also be removed from the mix.
Banks, corporations, and even countries can declare bankruptcy and escape their debts; student loans can not be discharged. One session participant recounted the poignant story of parents whose daughter was killed in a car accident. She died, but her student debt lived on, to be assumed up by her grieving parents.
During the Q and A, a long-time college professor’s observed that, in the ‘90s, many of his students attended school full-time while still managing to work 20 hours a week. Later, some juggled full-time school while working 40 hours a week. Most recently, students are working 60 hours a week and attempting part or full time study. Needless to say, this has greatly impaired these students’ ability to participate in college life.
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