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

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