According to the Bureau of Labor Statistics, since 1985 college costs have risen by more than 500%, exacerbating income inequality and damaging the reputation and affordability of higher education in the United States.
Michelle Cooper, president of the Washington-based Institute for Higher Education Policyacknowledged that the “skyrocketing” of tuition rates drives a wedge in an already widening wealth gap in the country, by making it increasingly difficult for those of meager means to advance thru education into areas of more upward mobility. She also warned about the effect this could have on the “prestige and status” of U.S. higher education
Over a 28 year period, the cost of a college education has inflated by an increase of 538%, compared to a 286 percent jump in medical costs and a 121 percent gain in the consumer price index.
Meanwhile it seems like all the Republicans want to do is make education even less affordable that it already is.
A year ago, the Republican Party Platform called for an end to the federal direct student loan program, stating it’s desire to give government money to banks to issue private student loans instead, undoing some of the student loan reforms made by the Obama administration. The platform reads, ”The federal government should not be in the business of originating student loans; however, it should serve as an insurance guarantor for the private sector as they offer loans to students. Private sector participation in student financing should be welcomed.”
The Republican platform would essentially have the government turn to the private bank as a student-loan-middleman system.
Last July, instead of working with Democrats on a responsible plan that would’ve helped students and blocked the doubling of student loan interest rates, Republican obstructionism caused interest rates to double to 6.8 percent, affecting 38 million Americans in the process. In the same year, the government made $51 billion in profits from the student loan programs.
Privilege is thinking something isn’t a problem because it doesn’t affect you.
Thankfully in August students were granted a temporary respite from loan interest rate hikes after President Obama signed a bill linking student loan rates to the financial markets.
The federal government currently offers Pell Grants to low-income students with award amounts based on variables like income, family size and how many family members are enrolled in college. It also offers direct student loans, which also vary in size according to family income.
These loans make it so you do not have to start repaying until you graduate, leave school, or change your enrollment status to less than half-time. The interest rate is usually fixed lower than private loans — and much lower than most credit card interest rates. Students with the most demonstrated need qualify for a subsidized loan, where the government pays the interest while you’re in school on at least a half-time basis.
Comparatively, many private student loans require payments while you are still in school, and can have variable interest rates, some greater than 18%. A variable rate that may substantially increase the total amount you repay. Private student loans are not subsidized either. No one pays the interest on that loan but you.
As outstanding educational debt soars past $1 trillion, it’s clear that the outmoded tradeoff of debt for diplomas is no long working for Americans. Students shouldn’t have to mortgage their futures and sign up for decades of debt repayment in order to gain access to the middle class – especially in today’s challenging job market.