When the president proposed his education budget, there was a lot for both the poor and the upper-middle class to like. For low-income students, the budget includes a substantial increase in Pell grants (government money for college). For the upper-middle class, it's even better, with a $2,500-a-year tax credit for students or parents paying for college.
One thing, however, was conspicuously missing from the education plan: an increase in the amount of money students can borrow via federally subsidized loans.
Now, maybe students aren’t in the mood to borrow more — aren’t college graduates already terrifically overburdened with enormous loan payments?Stories about the travails of students who find themselves hopelessly in debt obscure a truly stunning fact: The amount that students can borrow in federally subsidized loans has remained almost unchanged for more than 15 years.
How much has the cost of college gone up since then? In the 1993-1994 academic year, according to the College Board, the average tuition at a four-year private college at the time was $11,007. It is now $26,273. Four-year public colleges? Same story: up from $2,535 to $7,020. You can do the precise math yourself, but here's the bottom line: The money that students have available from subsidized loans has stayed almost constant, while the cost of college has risen more than 150 percent.
one of the solutions to student loan debt is ... yes, more student loan debt. At lower, government-subsidized rates. One legitimate concern about this — expressed in this discussion from the New America Foundation — is that for-profit and trade schools will just raise their tuition levels to take advantage of this.
What do you think of the this, how private banks gave student loans a bad name? also related to the unemployed rate...would you mind to give some suggestions?what should the lower-income families do during the recession to pay for the big amount of the higher education?
I think that this is a really delicate issue because so many people get into debt by themselves once they are financially independent, and while it does provide education I'm not sure that a student should leave school with thousands of dollars in debt, especially in this economy.
ReplyDeleteOn the other side though, a limit on federal loans excludes low-income students from the highest-quality of education and, I assume, allows rich families to extend their affluence for several generations because they are able to afford it.
Solutions? Well, schools need to increase need-based aid and possibly allow for alternative methods of payment. Perhaps schools could take a specific percentage of a student's income upon graduation, or parents could set up a fund with the state when their children are young and pay for a public education throughout their pre-college years. I don't know if programs like this are already in place--they may be, but its a possibility.
Also, a quality college education needs to become more affordable; too many students are denied the quality of education that they deserve based on their high school performance because of economic restrictions.
I agree that the price of college is simply too high. At K for example, the tuition is around $40,000 a year. Where would all that money go? While it's true that K gives lots of scholarships, even the price after scholarships can be too high for some people. I like the bill for the fact that it did increase pell grants and gave a tax break.
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College is ridiculously expensive. Even with the generous financial aid package that i recieved from K, after four years here I personally will be at least $30,000 in debt. While I think that it's worth it, I try to avoid thinking about how much additional debt I'll accumulate paying for grad school. I think that the tax credit and increse in Pell grants was a good first step, but that more needs to be done to help students pay the astronomical cost of a college education.
ReplyDeleteI couldn't agree more with the comments made. College education is very expensive. Its expensive for US citizens but how about international students whose countries face currency depreciation and inflation?
ReplyDeleteI am happy that the government recognizes the importance of a college education, but I think that more needs to and can be done to provide equal opportunities for a college education. A, E
The soaring costs of higher education pose a significant danger to thousands of people who consider themselves middle class, especially with the recession. I searched to see if there was any budget posted publicly for K, but couldn't locate anything. I'd be very interested to see average salaries and how much different departments and offices receive. As a senior, I've watched tuition rise from ~$32k to $40k, well above the yearly inflation rate. They did do the rather luxurious Hicks renovations while I was here, and had finished with the stuff in the library shortly before, but I have trouble understanding the justification. If alumni are donating less, raising tuition and thus reducing applicant quantity and maybe even quality does not seem the best business decision.
ReplyDeleteFaced with a GoP that is vehemently anti-intervention and business lobbies that are vigorously pro-subsidy, Democrats have relied on the tired old practice of subsidization. Now don't get me wrong, there are many instances where subsidies are useful (especially when given with regulations), but we're pouring money into the wrong spots. Rather than put a cap on the rates at which tuition can increase, we have given schools a steady pool of assured income, encouraging them to raise prices even higher. The Democrats have been trying to make their "health reform" bill very similar: giving the consumer money with which to pay for insurance. Except the rest of the bill has vastly less actual regulation and consumer protection than certain proponents are claiming, and no measures of cost-control.
The typical conservative answer of doing nothing is terrible, but the answer the Democrats have come up with is just as bad.
(A, E)
They mention in the article that while college tuition is increasing the amount willing to be given is constant. While it is a plus that government is increasing the pell grant and giving tax breaks to parents with children in college it is not enough to ease the affects that students are being faced with. I am a little nervous to receive my financial aid award letter. In my two years at K, I have been fortunate enough to have not had to take out a loan. Now with study abroad coming up, I am a little worried. A,E
ReplyDeleteFinancial aid affects students when making their decisions, at least it was one of the first things I consider when coming to K. Many college students think about having loans while in school because after four years, the loans keep on accumulating and at the end we end up with a big debt to pay. Now that they have raised the amount for the Pell grant I am excited to see my financial letter and see if it was affected by the change. I am glad that the President is thinking about the education of the new generation and making it possible for many low income students to attend college. A.E
ReplyDeleteBottom line, I think, is that college is way too expensive. I have so many friends at the community college right now who pay roughly $600 a year...$600, thats it! And even if I might be getting a slightly better education here, both me and the community college sudent will be graduating with a degree that gives us the same qualifications.
ReplyDeleteYes the tuition is increasing every year, especially for colleges like K... I know some people who choose to work first after graduation from high school mostly because of the high fees charged. Maybe it is due to the poor economy, but I really don't get it, since education is a fundamental project for the whole country, the tuition should be cut down in order to provide more opportunities of education for poorer students.
ReplyDeleteI hate that students have to pay so much to get an education here in the US. In Denmark, you are paid to get an education. Is this a reflection of our poor values? mmm, I think so.
ReplyDeleteI also think that the trend of increasing tuitions has to do with a college education coming-into-its-own as a societal norm. For instance I know plenty of people from my home town who are attending community colleges who would not have been considered "college-bound" students a few years ago. Also, a few years ago my sister started working at a job that required a bachelors degree upon her graduation from Albion, a job for which there was no bachelors degree requirement ten years ago. I think that the fact that a college degree is now necessary for some jobs that require no collegiate to actually perform encourages people to spend tons of money on a collegiate education. Also, I think that the fact that there are so many cheap options for college available this day and age allows the government to say "we're not denying a collegiate education to anyone, community colleges are a 'viable' option. However, I know that graduate schools and employers are going to consider a degree Kalamazoo College or U of M to be "better" than one for a community college, so it really enables the continuance of the socioeconomic gap in America. Also, because it has become a virtual requirement for steady employment, college education's demand has become inelastic, and as a result people are willing to pay ridiculous prices because they really don't have another choice.
ReplyDeleteThe biggest problem with this too is that college is becoming more and more of a necessity. This is like when you raise the price of all food items or another good example is gas. People need these things so no mattter how much you raise the price consumers will still have to buy because of how inelastic it is. College is the same way. Seeing yourself in a career almost requires college these days especially since we are competing against work force from other countries as well not just those in the U.S. Hopefully help can get to these students in form of grants and scholarships. I feel like increasing the amount you able to take out in a loan will just make it worse and people will just take out more than they should such as in the housing market.
ReplyDeleteReiterating a bit...college is super expensive and extremely necessary. Even with budgets, scholarships, and grants a college education is hard to earn. When comparing the quality and tuition of schools in other countries, American schools just don't match up.
ReplyDeleteAnd that is just at the university level. When people can make it out of high school in America, it is still so challenging to go onto college. To the contrary of what Ms. McKinney said today in class, I believe that the school system is thoroughly insufficient in America. In Chicago during the day you see kids on the streets, not in school. And the schools that are open have metal detectors at doors and if the school can pay for it, cops posted in hallways.
So with that example, it is really discouraging to try to move forward as a country when its people are having trouble finding safe and adequate education. E,T
Josh brings up a good point. In our society today, one needs college in order to get a decent job (for the most part). Therefore one is willing to do anything to get into college, no matter the cost. The better college it is, the more it'll cost you (usually). I've heard some say that in the 50s college was 60 times cheaper, however- other than the fact of the economy back then compared to now- one could get by very easily without a college degree. I think this is a good example of supply and demand, in the sense more people are demanding to get into college, therefore more colleges are increasing their tuition rates.
ReplyDeleteI agree with Sean. Government intervention often seems to help the people who are being hurt so that they suffer less, instead of stopping the people who are causing that suffering. There needs to be some sort of cap on the amount that tuition can increase. A
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