Why Doubling Student Loan Interest Rates Is a Good Idea

graduateBack in the days before children, my husband and I squabbled occasionally on whether or not we should help our kids pay for college. I thought it tremendously important that we do so, him not so much. It’s one of those bridges we agreed to cross when we came to it.

Then we had a kid, looked at our schooling options, and decided to enroll her in private school, despite the economic toll it takes on our family. It’s a sacrifice we’re willing to make for our children, and they’re getting a better education than they would at the local public school.

Side note: The public school would spend more money on our kids than the private school they attend does. This is why I strongly support a voucher system, because choice and competition increases quality of education, not massive sums of money thrown at it.

Anyway. Because we’ve decided to enroll our kids in schools that will actually teach them, rather than give them participation trophies and spend money fighting social issues in the legislature, the importance of paying for their college educations has dwindled considerably for me. In fact, given the state of universities these days, the importance of even going to college at all is highly questionable.

College grads aren’t getting jobs, and at least 85% of them are moving back home with mom and dad. I love my parents a lot, but I would rather share an apartment with three other girls and work flipping burgers or cleaning houses than move back home with my parents after graduation, but to each their own.

Given the fact that college graduates aren’t exactly finding easy employment combined with the precarious student loan business bubble, I can’t really see encouraging kids to go into debt for education unless they want to go into a field that requires it, like medicine or law. Seriously … what’s the point?

There’s been a lot of talk in the news recently about the doubling of federal student loan rates, which completely ignores the real problem: The outlandish cost of higher education these days.

Sarah Lacy over at TechCrunch has an interesting write-up on an interview with PayPal co-founder Peter Thiel, who boldly states, “No one pays a quarter of a million dollars just to read Chaucer,” while talking about the outrageous price tag on a Harvard education.

Mr. Thiel is challenging the notion that college is necessary for anyone that wants to be successful by sponsoring the 20 Under 20 Thiel Fellowship, a program that has granted $100,000 to 20 people under 20 years old to drop out of school and spend two years starting their own business. So far, results have been quite impressive.

The fact of the matter is that not everyone needs to or even should attend college. It’s not the shoo-in to a job it once was, so young people should weigh the cost-benefit analysis very carefully before deciding whether or not to enroll in post-high school studies. 

Federal loan rates doubling might make that decision easier for many young people, and I salute those that say, “No thank you,” to a horrendously expensive education just because they think that’s what they need to do. I’d encourage any and all young people to use wisdom, discernment, and practicality when trying to figure out their calling in life

Then again, public schools aren’t really big on teaching wisdom, discernment, and practicality these days. They’re having a hard time just teaching kids to read and do basic math.


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 Schlusselbein2007/Flickr

economy, education, in the news, politics


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Miche... Michelephant

That is such a non argument. With college costs skyrocketing and the job market being crap why would we force young people who are trying to give themselves a competitive edge onto welfare (which you also don't agree with)

nonmember avatar Brooke

We have savings accounts for our children. If they feel a need to go to college, it will be used for that. If they don't choose to go to college, they will use it to start a business. I don't think college= success.

nonmember avatar blh

Maybe college grads are having a hard time finding jobs but you sure as hell aren't going to get a good job without going to college. I should know.

bills... billsfan1104

Maybe college studrnts need to start thinking about getting marketable degrees, instead of a four year degree a non marketable degree. Community college is an option and not looked down on like before. My daughter was accepted in one and guess what, she will have hardly any debt for her first two years, when she is getting her bullshit courses out of the way.

Flori... Floridamom96

The "college or welfare" argument is a false premise. My husband has not one second of a college education and is partner in and president of a multi-million dollar company. A cost/benefit analysis is the best way to decide on a college education.

Stacey. Stacey.

This is why I am all for technical or vocational schooling, where you actually learn how to do a job without all the nonsense. Something like nursing, dental hygenist, electrician, insurance sales, etc.

nonmember avatar R. Laban

It is getting harder to get the jobs there are without a degree and a master's degree is sometimes necessary as well. My son, has worked hard in HS and we have worked hard all our lives, unfortunately we do not have enough to send him to his 1st choice school , but he will go to college and have to work and take out loans. There is no need to double the student loan rate and make it even harder for the middle class. the 1% need to pay their fair! share.

zandh... zandhmom2

My son has one more year of high school then he is going to a community college to get his associate degree and then he plans to go to a trade school.  I am fine with that.  The 2 years in the community college will cost less than 10,0000.  We have been saving for his and his sisters college since they were born and if they both go this route...momma getting a beach house with the money left over :)))))

Miche... Michelephant

The rates are fine as they are.  The ides that doubling them will make kids think about their financial future is just a load of bull.  That's like saying let's arbitrarily double mortgage rate simply to make people consider how expensive buying a home is.  Everyone should pay for the education they choose to get but doubling rates is just asinine.

nonmember avatar Guest

What a load of self-righteous manure! How myopic to make decisions from behind the screen of someone who has the lifestyle that allows them to be a blogger, instead of having to have a real job like that of a teacher. Half of the problems that teachers encounter come from parents like you who think that because you made a kid you are now the be-all, end-all of what kids need. No, not all teachers are perfect, but that is true across all spectrums; you clearly show that not all bloggers have a point of view worth sharing. However, teachers are educated in child development and psychology, pedagogy, methodology, and, of course, their content area, whereas most parents are not. But then they are told by parents how to run their own classrooms, and because school funding is affected by attendance patterns, schools must act like businesses to keep your "business" or, worse, keep from having to fight off another frivolous lawsuit because YOU don't like what's happening. In fact, I'm glad you decided on private school; do us all a favor and keep your kid out of public school so we don't even have to deal with him. Bully some private school administration instead.

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