Government

Student loan rates

Elizabeth Warren is the champion for lowering student loan rates and allowing students to refinance at today’s lower rates. Republicans have blocked her efforts presumably because the lower rates would be payed for by raising taxes on million dollar annual incomes and above. 

While I believe obtaining a college degree as a free pass to success is an illusion, supporting college education is a necessity. But doesn’t that mean that if we are going to make education more affordable we must deal with the basic cost of college as well as the way we pay for it?  

Have we learned nothing from trying to make health care “affordable” simply by subsidizing insurance premiums?

So, neither “free” college nor low interest loans are the sole answer and by themselves may be counterproductive… in my opinion. 

What are your ideas for not only making college affordable (really), but assuring  we collectively get the most value for society as a whole?

  

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6 replies »

  1. The solution – remove ALL government guarantees, and make the loans dischargable in bankruptcy. You won’t have sanity in terms of borrowing, nor will you effectively cap inflation/cost increases until financial discipline returns. Let the colleges and universities use their endowment funds to issue scholarships – placing themselves at risk. Harvard, for example, has $37+Billion in assets under management.

    In terms of those who cannot afford college, and those whose parents are not in a position to guarantee a loan, and who cannot convince anyone to lend them money to place monies at risk for this purpose, there is always the alternative of “work and save and attend at night” (which I did) or the option of “wearing of the green” (which I also did during the Vietnam conflict). My father died in 1969 when I was a senior in high school. There were five children (though the oldest, my sister, had just graduated from college). An older brother was in college on a scholarship – working when time permitted. I was not as good of a student, and while I did obtain scholarships and grants – some based on academics, some based on financial need, I flunked out, and lost it all (going from 2S to 1A).

    So, my only option was to volunteer my draft, serve, then, post-separation, attempt to go back to school. Once back at school, I had 11 years of working full time while almost always going to school in the evening full time – from March 1974 through December 1977 (including summers), from September 1978 thru June 1979, from September 1980 thru June 1982, from March 1983 thru August 1985, and most recently, from January 2010 thru December 2012 – four degrees, no loans of any significance (other than for cash flow purposes).

    It is doable. How badly do you want the education, to gain skills, to get ahead?

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    • I agree and have similar scenario. Graduated high school prepared for nothing. Tried to go to college at night after working several years, but found I had to take two years of preparatory courses just to get admitted. Tried it for one semester, failed one course and quit. In 1968 my guard unit was called to active duty for two years. When I got out I went to school full time and worked full time for a year and then eight more years part-time to get a degree using VA benefits and then employer tuition benefit (while raising four children which I hardly saw awake). Where there is a will there is a way.

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  2. I agree, “obtaining a college degree as a free pass to success is an illusion” however, offering an affordable education could benefit society as a whole. Perhaps we should start in high school- for those who are not heading to college, offer an associate degree or a technical degree in the last two years of high school. For those who are college bound, increase the intensity of the high school course work, college-geared classes and grades that indicate the student’s commitment and desire to go to college. In fact, the final year, the high school senior year, could be the at the intensity of the first year of college to help the student decide if college is right for them. This should pare down the number of students to those who want an education vs those who want a free ticket to party for the next four years. Once in college, the free education is a one-time offer- you blow it by screwing around, you are out of college with loans to pay back.

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  3. To make college affordable, the government loan guarantee must be capped so that college have to stop raising tuition. This will also stop college from building dorms that are 5 star resorts.

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  4. Another tax the rich scheme that will not work. How about taxing the Colleges and Professors more, the direct beneficiaries of the student loans, to pay for it.

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