How does the cost of college affect us?
by hstri1 on February 17, 2014 - 11:33pm
How does the cost of college affect us?
The beginning of this article starts off by speaking about Obama and his persuasion skills to team up with republicans over the ever-present issue of student loans. Who ever though we’d see Obama and republicans agree on something? Maybe there is hope for change, but not so much for college aged students and younger. As a college student I am directly affected by the cost of college and student loans; as are my peers. Implementing the “thinnest of temporary solutions,” in 2010 congress and the president ensured that the interest rates for undergrads wouldn’t rise above 3.86% that upcoming year. Obama claimed that no money would be lost to the “middle man” also known as the banks, instead loans would go straight through the federal government with a fixed interest rate. Even though this was a step in the right direction, it was still predicted that interest rates on undergrad loans within 5 years would climb to 7.25%, while graduate loans had the possibility of reaching 8.8%. Seeing that this reform and these statistics were instated in 2010, that time is now and fixed interest rates for subsidized and unsubsidized loans for undergrads are at a stand still 3.86%. However the cost for higher education is rising at a steep incline, faster than housing, health care, and energy. “Between 1950 and 1970, sending a kid to a public university cost about 4% of an American family’s annual income. Forty years later in 2010 it accounted for 11%.” Many institutions of higher education needed compensation after the mortgage crash of 2008, which led to our recession. Even after making budget cuts, schools everywhere raised tuition prices and sought out federal loans. All of this leads to the grand scale of the student debt exceeding $1 trillion, and what’s worse is the government makes an estimated $184 billion over 10 years whereas the banks were making $86 billion before the reform. The average student graduates college owing at least $27,000. Many of these students aren’t even fully aware of what they’re signing up for when they agree to these loans. There are some solutions proposed by the article such as creating requirements for colleges to be a part of the lending program. Another problem that runs deeper is the requirements to receive federal loans include that a school must be accredited, however the accrediting agencies aren’t a part of the federal government, they’re run by nonprofit organizations run by existing colleges. By outsourcing this responsibility the government loses all control over regulation and distribution of federal loans to colleges. A lot of the money coming from federal loans for schools is put into new buildings and paychecks for the administrators, all things that we as a society hold value to and see that as symbols of prestige.
One of the objectives of this article that I found important was to see how student loans are affecting a majority of Americans, and to help kids get educated on where their money is coming from and what strings are attached. Just like the sociological imagination, we as individuals each are faced with this problem, however it is bigger than all of us and shows the impact of our society’s issue on us. In the grand scheme of life we are told college is important and necessary for a job, which is related to the common belief of the American dream; if you work hard enough you can achieve anything. However money holds a lot of value and it’s hard for anyone to succeed when they have the weight of irrevocable loans hanging over their head. Many kids are being run through “diploma mills” and sent out into a world with a high unemployment rate and already owing more than they can afford. Although this issue can be seen from the point of view of an administrator of a university, or a member of the government, it is mostly affecting the kids who can never escape these loans even if they declare bankruptcy. The question being raised by the article and by myself is how can we make education more affordable, and help students without paying the consequence of being hundreds of thousands of dollars in debt. Like many problems in society, change can happen when many people step up and bring light to a situation and demand a solution. (Rolling Stone, 8/29/2013, Issue 1190, p34-39.)