Student Loan Relief Is An Investment, Not A 'Cost'
By Jeff Bryant
April 26, 2012 - 2:43pm ET
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Republicans in the US House of Representatives have scheduled a vote on Friday to stop interest rates on college student loans from doubling beginning July 1. Up until now, Republicans on the Hill had been staunchly opposed to any bipartisan action to stop the interest rate increases. What gives?
Not that there aren't multiple reasons for urgent action on student debt relief . . .
Drawing from the data compiled by Project Student Debt, we know that "members of the college class of 2010 who took out student loans owed on average $25,250 upon graduation, a 5 percent increase from the year before." Total student loan debt has reached $1 trillion, exceeding what Americans owe on their credit cards.
Furthermore, this problem will only get worse. The cost of attending college -- which has increased by 559 percent since 1985, rising far faster than costs for gasoline and health care -- continued its steep climb in the 2011-12 school year, with in-state tuition and fees at public four-year institutions averaging $8,244, which is 8.3 percent higher than the previous year according to The College Board.
So the Republican's swift action to call for a vote on relieving college student loan debt is a good thing, right? Not at all.
Republicans Think Education Is Just A Cost
According to a report from The Hill Speaker John Boehner has coupled the vote on student loan relief "with an attack on Obama’s healthcare law" by insisting that any student loan debt relief be balanced with cuts to healthcare funding.
Democratic Congressional leaders in the Senate have countered Republican objections to student loan relief with proposals to offset the $5.9 billion budget impact by closing a loophole that lets wealthy shareholders in S-corporations dodge payroll taxes. In the House, Rep. George Miller, the senior Democrat on the House Education Committee, introduced legislation that would balance any impact of student debt relief by eliminating tax breaks for the oil-and-gas industries.
Framing the debate exactly right, however, was President Obama.
The Right Frame For Speaking About Student Loan Relief
Whether you're here at a four-year college or university, or you're at a two-year community college, in today’s economy, there's no greater predictor of individual success than a good education. Right now, the unemployment rate for Americans with a college degree or more is about half the national average. The incomes of folks with a college degree are twice as high as those who don’t have a high school diploma. A higher education is the clearest path into the middle class.
The president got this exactly right. We know that educating our children and young adults is one of the best investments we can make as a nation. It's investing in America. When we help the next generation of Americans grow and succeed, we are paving the way for our country’s future citizens, workers, and leaders. Supporting students and paying for education isn’t just the right thing to do. It’s smart.
So what Congressional leaders of both parties need to get a grip on is that relieving our students' debt burden is not an intolerable cost but an essential investment. Republicans in particular need to rearrange their heads to understand that the interests of the nation are best served when education is viewed not in the context of today's budget but in the context of the future return of the investment. Democrats, on the other hand, who seem to already understand the ROI of education spending, must also understand they need not make any concessions at all for education investment. In fact, they should start negotiating from the position that student loan interest rates should be lowered and the subject of debt forgiveness deserves to be on the table.
Sensing that conservative Republicans in the House may have gotten this argument completely wrong, Mitt Romney, Obama's likely opponent in the fall general elections, executed one of his signature flip-flops he is so well known for and suddenly expressed support for student debt relief.
Romney Way Is The Wrong Way For Education
Remember, it was just last month that Romney made headlines when he warned a high school student not to "expect the government to forgive the debt that you take on" for a college education. Yet now he apparently fully supports "extending the temporarily relief" on student loan interest rates.
But don't for a minute think that Romney views education spending as an investment. Whatever the current Romney-stance-of-the-day may be on student debt relief, we know all too well that Romney's core philosophy on education is to view it through the lens of business and profit. In previous remarks, he has sung the praises of for-profit colleges that charge exorbitant tuition, have low graduation rates, and load students with debt amounts that are even higher than the current national average.
If you want to view the gross underbelly of the Romney Way for higher education, you need only venture into the subways of New York City. Car after car are emblazoned with colorful banner ads touting colleges, universities, and certificate programs that offer young adults opportunities to "advance" themselves and achieve "success." The ads invariably feature images of smiling young adults of color and headlines exhorting them to "aim high" and "advance yourself." And a prominent bullet point in nearly every ad is "we'll arrange the financing for you."
The advertising onslaught stems both from the demand our nation's younger generation feels as a result of being increasingly unemployed with fewer and fewer job prospects and a relentless campaign from institutions of higher learning to capitalize on that anxiety with promises to provide a pathway to future employment through education. It's marketing 101 -- selling pain relief for the "Excedrin moment."
An especially prominent marketer behind these campaigns is the rapidly expanding for-profit higher education sector that, according to Republic Report's David Halperin "gets about $32 billion of its approximately $35 billion annual revenue from federal financial aid."
Yet instead of calling for investigations of this sector's impact on the student loan crisis, prominent Republicans speak at for-profit higher ed meetings and rake in campaign contributions from these institutions.
Stop Disinvesting In Higher Education
Of course for-profit colleges are not the only ones to blame for the expanding debt burden being placed on young adults. Conservative governors and state legislatures across the nation have enacted huge cuts to public university systems and community colleges. California's higher education system now extracts a greater percentage of its funds from tuition and fees charged to students than it does from government funding -- making it a public education system in name only.
According to a recent article in U.S. News and World Report,"A major factor in tuition increases at public institutions has been the withdrawal of state and local funding."
Quoting from a document called "The Great Cost Shift," the article describes "an irreversible slide of U.S. higher education being a collectively-funded public good to that of an individually purchased private good," and offers plenty bullet-points in proof, such as:
• The proportion of revenues that public colleges and universities received from state appropriations dropped from 38.3 percent in 1991-1992 to 24.4 percent in 2008-2009.
• In addition, the financial aid system has failed to keep pace with escalating costs, forcing students and their families to rely on financing strategies that reduce their odds of completing school.
• States reoriented their financial aid programs away from need-based assistance to merit-based aid, which favors wealthier students.
Invest In We, The People, Not Big Business
Higher education must not be just for the wealthy and the privileged. And government needs to fund the education our children deserve rather than direct more of that money to business profits that benefit only the few.
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