If the current student loan interest rate is allowed to expire, interest rates on student loans will double to more than 6 percent. I feel the same way about this issue that I do about the payroll tax. Something needs to be done but maybe not with the 2012 election right around the corner!
Both sides need to be aware of how pinched the middle class feels right now and wary because middle class moderates could define these elections.
Rates are locked in for life so a vote against the extension won't impact current loan holders. But the perception that the Republicans are messing with the step an education represents could be catastrophic during an election year. The Republican strategy has been to demand that the money to continue subsidizing student loans at a low rate should come from cutting parts of Obamacare. What a crafty move that was. If the Democrats don't agree, it looks like they voted to double the rate on student loans. It could be political tit for tat, though, since the Democrats refused to agree to the debt ceiling limit unless the plan included new taxes.
It's important to consider that Americans are carrying a trillion dollars in student loan debt. And that colleges and universities may not feel the pressure to rein in costs because they know Uncle Sam practically guarantees a loan to any student whose family makes less than $50,000 a year. There's also the reality that the unemployment rate for recent grads is more than 8 percent.
The solution lies within the private sector. Private scholarships from potential employers will help companies find graduates who have the skills they need. And students will have less anxiety about taking on student loans if they can see a job in front of them. It works for the Army, why wouldn't it work for the rest of us?
This post is part of a weekly conversation with our Moms Matter 2012 political bloggers. To see the original question and what the other writers have to say, read What Do You Think About the Student Loan Interest Rate?
Image via rrunaway/Flickr
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Comments 21
The private sector already helps students with college tuition. They hire teenagers and college students and pay them wages. You know what? I want to be a blogger for CafeMom. I have a right to make a living to support my family. I'm new at this though, so you have an obligation to help me out. For every 3 blogs you write you need to write one for me to publish under my name. You owe me a chance to get started. You need to give your fair share. You already have success as a blogger and now it's my turn. You have had 100% more blogs published than I have and now it's time for you to give back.
Wait, Florida, while you have a point about socialism and the whole "you should give just because you have it" philosophy, I don't think that's what she's saying.
I think her idea is more along the lines of the "Teacher Grants" that the government is offering. You pledge to serve the first 5 years of your teaching career in a particular area (usually a low-income, "underserved" area), and the gov't picks up the tab for your education.
I don't think it's such a bad idea, IF a college student is absolutely sure about what he wants to do for a living. Say that kid DOES want to be a blogger. CafeMom would pay for his college degree, and in exchange, he will write for them (at a slightly lower salary, perhaps) for the first four years of his professional career. If he graduates and has an offer from the New York Times, he is free to take it, but then he must repay CafeMom for the education that they provided him - possibly with interest.
It could work. As she points out, it already IS working for groups like the Military. Why shouldn't the Private Sector take the same track?
However, I'm not sure that this is where the writer was going. The tone of the article seems to say that the "rich" owe it to people...
Maybe I'm off base. But for now, floridamom seems to have gotten the same impression that I got, so I'll have to LoL and side with hr :)
I never cease to be amazed by the amount of resistance people have against helping individuals go to college. If we want to continue to be a leader in the industrialized nations, I think we most definitely need to look at something which allows anyone who wants to go to school to be able to. Whether it be contributions from the private sector, more subsidization from the government, or socializing higher education, something should be done. It makes a lot more sense to me to fund a program where people actually want to better themselves vs. welfare (for example) which has a lot of people abusing the sytem and sitting on their ass (not everyone...) Just my two cents.
I also firmly believe that the entire college/university system is screwed up, AND I think that companies (large, small, whatever) put WAY too much emphasis on a degree.
I agree with Florida's posts on other threads that someone should be able to use their HS diploma and their wits to become a success. We've seen this time and again - Bill Gates is a prime example.
Unfortunately, high school isn't what it once was. I graduated from HS in 1988. At that time, I could write a logical and well thought out answer to an in-depth essay question. I could solve for X. I could tell you quite a lot about the Periodic Table, and even do some chemical equations. I could tell you quite a lot about our own American History, quote from the Declaration of Independence, name the Amendments in order and explain them. I could talk intelligently about WWI, WWII, Korea, and Vietnam, as well as other periods in history, all the way back to Biblical Times. I knew the difference between there, their, and they're. And this is the result of a public school education.
Now, I receive emails from our elementary school's principal that are peppered with spelling, vocabulary and grammar errors. I talk to a young friend of mine (5th year college senior, btw), who cannot tell me what the Constitution IS, much less what it contains. She cannot write beyond about the 5th grade level.
cont
What I'm saying is this: the issue is not *just* Student Loans, although that's the symptom under scrutiny. Our entire educational system is effed up, from sex ed in Kg classrooms to having to take 000-level math in college. And we should be addressing the ENTIRE problem, not just throwing crap against a wall to see what sticks.
Nowadays, a Bachelor's Degree is what a HS Diploma used to be. And a Master's has dropped a level, as well.
We need to get ourselves back to a HS Diploma actually having meaning. If that means failing kids, then so be it. Get back to teaching kids that they CAN succeed without going to college, because college is not for everyone. Some people NEED to get out there and work, but in the current atmosphere, that is a very stupid move to make. If you don't have a bachelor's, you are sunk.
So creating an atmosphere where EVERYONE must go to college, and then making college costs debilitating ($50K and more for a year's tuition???), and THEN making it so that the only place to get that money is by going to the government, and THEN keeping the pay-back rates artificially low? That is a recipe for absolute disaster.