As U.S. Senators move toward reforming student loans to lessen debts after graduation, Boston University officials and students remain concerned about the ever-rising cost of higher education.
At the Education Writers Association Conference on Higher Education at Northeastern University on Saturday, Mass. Sen. Elizabeth Warren said students should have easier options regarding eliminating student loan debt, BU economics professor Barton Lipman explained.
“The original rationale for it [Warren’s proposals] is that student loans are different from house loans,” Lipman said. “If you get a loan to buy a house and don’t repay, then the bank can take your house. This protects the bank in case of default so it makes them willing to charge a lower interest rate.”
Warren’s proposals include eliminating government profits from federal student loan programs, refinancing student debt to give students the chance to take advantage of historically low interest rates, and restoring basic consumer protections such as bankruptcy relief, according to a transcript of her remarksSaturday.
“Student loans should cost the students no more than what it costs the government to make those loans,” Warren said at the conference. “The point of these programs should be to help our kids get an education, not to tax them for the privilege of borrowing money to go to school.”
Lipman said current regulations on student loans give students no other option but to pay them back, even if students have to claim bankruptcy.
“If the law were changed, it would likely increase interest rates on students loans … [and] would also mean students have more options for dealing with their debts,” Lipman said. “The real question in terms of effects is: would the net effect of these changes make it easier or harder for students to finance their educations?”
However, Vice President for BU Federal Relations Jennifer Grodsky said in an email that less than 1.5 percent of BU graduates default on their federal student loans, which is significantly less than the national average of 13.4 percent.
“We are fortunate to be represented by a Senator who shares our passion for making sure college is accessible and affordable,” Grodsky said. “We look forward to working with the Senator as she addresses higher education policy.”
The national debt caused by accumulating loans is approaching $1.2 trillion, making it difficult for recent graduates to pay mounting bills while attempting to settle into their post-collegiate lives, Warren said at the conference.
Mariah Stein, a College of Communication junior, said considering the rising cost and demand for higher education, officials should work to make student loans and debt easier to manage.
“It’s becoming so much more important to have higher education because in many job environments, they won’t take you nowadays unless you’ve got at least a bachelor’s degree, so I think it shouldn’t be so ridiculously expensive,” Stein said. “If you have to give every penny you have for it, you’re never going to stop having to stress over money.”
Anya Golkowski, a College of Arts and Sciences senior, said although many students already have a plan as to how they are going to repay their loans, there are still not many options out there for them to efficiently deal with looming debts.
“It’s ridiculous how high it [tuition] is starting to cost,” Golkowski said. “It’s really unfair that the previous generations didn’t have to pay this much for their education. I understand that there are different economic fluctuations and that everything changes according to them, but that’s still not helpful — there are not that many options for people [with debt].”
Doruk Uzel, a CAS freshman, said he worries he will spend the rest of life in debt, even though he only took out one loan.
“Loans were created to make us suffer and spend the rest of our lives in debt,” Uzel said. “… I have no plans just yet, but all I know is I’ll probably spend the rest of my life paying off this loan. I think higher education keeps making itself less accessible and then those who are accessible to it sometimes tend to make divisions in economy/groups already.”