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ABOUT THE QUICK TAKE Every Friday, the Quick Take columnists will offer their views on an issue of significance to American University. Notable members of the campus community will also be invited to contribute to this new feature. Suggestions for topics and other ideas from readers are welcome and encouraged, so please submit comments to edpage@theeagleonline.com. |
Last week, President Obama issued a series of executive orders that will restructure the way that college graduates repay their student loans. The heart of the plans indicates that after students pay 10 percent of their income toward there federal student debt for 20 years, the remaining balance will be waived. Surely this represents some assistance, but how much help will it really be? Our Quick Take Columnists weight in:
Joe Gruenbaum
Obama's band-aid for student debt
Rachel Lomot
Debt is a symptom of outrageous costs
Obama's band-aid for student debt
By Joe Gruenbaum
According to the most recent data published by the College Board, total student loan debt in the United States recently surpassed $1 trillion. That’s a lot of money. And understanding the drag that such debt has on the economy, President Obama recently doubled down on efforts to help students with student loans through an executive order. The order reduces maximum loan payments as a percentage of income and reduces the interest rate by 0.5 percent.
The Atlantic last week published an analysis of the plan suggesting it would only save students $4-8 a month. The Examiner got $30 bucks a month. Whatever the case, truth be told this plan will only have a mild affect on the economy and student loans—though 1.6 million people are affected, individuals won’t see a very noticeable change in how the loans affect them. Obama’s plan is primarily a political action. That’s not to say it won’t do some good. It just won’t do very much.
What most student loan proposals have done—and what Obama has now done again—is to marginally help a few, while ignoring the root causes of the problem. This proposal is just another couple of tylenol for a bedridden patient. Obama’s loan proposal gives a bit of relief to students with federal loans. However, the government puts a limit on how much you can borrow, so many upper-middle class students at private colleges are then forced to take out private loans if the government doesn’t give them enough. It’s an interesting paradox, a sort of donought in college financing; their parents make too much to qualify for significant financial aid, but too little to pay for college out of pocket. Obama’s plan doesn’t offer any remedy or restriction on these private loans, many of which have exorbitant costs and high interest rates. But that’s not the root cause of student loan problems.
The root cause—the disease plaguing both students and the economy—is the skyrocketing cost of college, both public and private. College costs have been increasing at rates much higher than that of inflation for the last 15 years or so for no apparent reason. And the cost of private universities is increasing even quicker. This year public colleges are 8 percent more expensive than last year. Once again, however, the administration is silent on this issue.
Now, I’m not saying I know exactly how to regulate the cost of private college—or that it should be necessarily regulated. But some action should be taken to address the central issue that is forcing students to take out loans in the first place.
Obama’s executive order looks good, sounds good, and doesn’t do much good. His action is simply another band-aid on the arms of struggling students across the country. It’s time that the administration started looking past current loan debt to exorbitant college costs. It’s time for policymakers to stop treating the symptoms and start attacking the disease.
Joe Gruenbaum is a Freshman in SIS and a Quick Take columnist for The Eagle.
Debt is a symptom of outrageous costs
By Rachel Lomot
We are told our whole lives that college is necessary, that higher education is the only way to achieve our dreams. Personally, there was no question in whether I was going to college; my parents gave me a one way path and I wasn’t arguing. And to be honest, college is great, especially at AU. I get to take interesting classes, hang out with new friends, and explore a fantastic city.
But is it worth it?
The recent protests on student debt at Occupy D.C. and President Obama’s new student loan executive order show that there is something wrong. College students who attend a 4-year university are graduating with an average debt of $24,651. The average cumulative student debt has increased by 5.6 percent a year since 2003-04.
However, here at a private university like AU, the numbers are much higher. The average student debt at a 4-year private non-profit institution is $27,535. What’s worse is that 70.5 percent of students have to borrow to attend schools like AU. Such a high percentage shows that it’s no longer just the lower class that needs financial help. Essentially, no one is able to afford college.
President Obama proposed this new student loan policy to aid graduating college students. It entails that after 20 years of paying 10 percent of one’s income post-graduating student debt is forgiven, if you become a teacher, nurse, or work in a public service career than the debt is forgiven in 10 years.
Student debt is a problem, but for our country the root of the issue is rising costs of college education. College is beginning to seem more like a privilege for the rich than a personal right. In fact, a new study by College Board displays the dramatic rise in prices. My father graduated from college in 1984 and the average tuition and fee price for a 4-year private university was $17,547. Now, as I enter college, the average tuition and fee charge is a whopping $38,589. How did that happen? How can it be that in one generation the expense of education could change so drastically?
Student debt will remain a problem until tuition prices have gone down. It is predicted that by the 2020 school year college tuition will have risen from its current $38,589 to $58,531. I fear for future generations, soon the problem won’t be how to forgive student debt, but instead how to send them to school in the first place.
Rachel Lomot is a Freshman in SIS and SOC and a Quick Take columnist for The Eagle.
