In efforts to gain perspectives from students of Democratic and Republican political affiliations, The Daily Free Press asked BU College Democrats and BU College Republicans to answer the following question: how should the government address the student loan crisis?
As a college senior preparing for graduation, I took many issues into consideration this election season. Jobs and the economy are on everyone’s minds, especially with the high unemployment rate that recent college graduates will have to face this spring. In this economy, a growing percentage of students rely on loans to finance their education, and a number of students and their families face skyrocketing prices for higher education and even higher debt burdens as a result. According to the National Center for Public Policy and Higher Education, the cost of college has increased by 439 percent since 1982, and about half of undergraduate students are now borrowing to pay for college, with an average debt held at $25,000 upon graduating. The College Board reports that the amount of student loans taken out in 2010 reached $100 billion and total loans outstanding exceeded $1 trillion for the first time ever. The “higher education bubble” is making education unaffordable, while defaulting and loan forgiveness have been established norms and expectations. This country needs a new direction, a direction where college can be affordable again and paying off debt is realistic.
Since the Department of Education was established under the Carter administration, we have seen a perpetual cycle of the same occurrences in federal education policy: The DOE increases subsidies for college, inflating students’ buying power, in turn allowing universities to raise tuition, which ultimately increases the demand for more government subsidies. This country cannot afford more of these policies, as increasing federal subsidies will only shift the responsibility of paying for college from the student, directly benefiting from the college, to the taxpayer.
The constant increase in tuition rates is overwhelming the efforts being taken by the states and federal government to provide more support for higher education. This country is investing more money than ever in higher education, yet a four-year college education continues to become more expensive for students and families. It has shown that more spending, regulation and control from the federal government has not solved this problem. Flooding colleges with federal dollars will only drive tuition higher. As students continue to borrow more than ever to pay for college, the colleges themselves are left to pay the bill, and the only way for the colleges to pay for this is to increase tuition and fees.
While the problem is easy to identify, the solution to lower costs and increase flexibility for students can be difficult. A fundamental restructuring of higher education would be of great benefit to the country, especially with a stronger global economic competition. Reforming higher education will also have an effect on increasing economic mobility of young Americans from lower-income families and allow for greater opportunities to earn an affordable college degree and achieve the American Dream.
One thing that could be done would be to reduce student indebtedness and boost saving for higher education by shifting college costs away from debt financing and toward more financing through saving. Federally subsidized student loans encourage indebtedness instead of savings, and it makes it much easier for colleges to raise tuition. To do this, students and their families must be given the information they need to weigh the costs and benefits of the many options available to them. Better information about products and services helps consumers make more informed choices, and this is especially vital when considering postsecondary education. Students must be clearly informed about their obligations when they apply for federal student loans and not given an empty promise that their loans will simply be forgiven if they cannot afford to repay them. It is important that students receive support that goes beyond a check-in from a collections agent to help keep them on track to repayment.
Overall, there are aspects of current reform that have been working. Continued long-term federal investment in basic research at higher learning institutions has been a crucial source of innovation in our economy and will be imperative moving forward to achieve success on the global scale. As our economy demands more advanced and diverse skills every day, our higher education system must meet these demands in order to properly prepare students for post-graduate life. A long-term funding solution for federal student loans is necessary in order to give students and families the resources they need to succeed after graduation, and after that, being able to find a job that can provide a rewarding return on their educational investment.
Boston University College Republicans
Vice President of Operations