8/27/2013
The article I found comes from the British newspaper "The Guardian" and explains the downsides to an agreement reached by Congress concerning student loan debt. The article, in its entirety, can be found here. This article, from the "Washington Post", gives some background on the actual legislation that was passed.
Overall the article makes the point colleges are too expensive for the average middle class college student. The article also criticizes the student loan interest rate legislation for its relatively ineffectual solution. The legislation, according to the article (and myself for that matter), failed to address the primary concern of collegiate expenses: the actual cost. Total collegiate costs for a four year degree in the past 30 years has risen a ridiculous 357%, compared to a more modest 120% raise in the CPI (consumer price index, meaning how much things cost) over the same amount of time. The article also shows the American people are at a bit of a dilemma: they need to go to college in order to get a job, but college costs are also at an all time high. Still more, the job market in the past couple of years has been incredibly bad, so even with a four year college degree some will still find it difficult to find a job. Towards the end of the article the author questions the necessity for some to go to college. The New York Times, however, recently published an article showing this necessity is at an all time high. Now more than ever is a four year degree required to work anywhere other than McDonalds. Jobs that require a college degree are the backbone of what make this nation great. The more we discourage potential college students with excessive amounts of debt, the more we start to fall behind our foreign competitors.
Although the legislation's immediate impact will be to keep student loan interest rates at around 3.80%, it also tied this interest rate to the Federal Reserve Boards interest rate. Meaning if the Fed raises its interest rates (as it likely will) so to does the interest rates on student loans go up. There is, however, a cap to interest rates for student loans, but this is only for undergraduate degrees. The cap is set at 8.50%, and according to the CBO interest rates will reach that rate within the next five years. Meaning the piece of legislation is only another temporary fix.
Ultimately, we need to move towards a direction where the government pays for college expenses for everyone (at least those who graduated high school). This system would complete the ambitions of some of our founding fathers (notably Jefferson), and it would pull the United States into the 21st century. A system where education is free is the only system that can guarantee everyone has an equal opportunity, despite race, economic background, gender, religion, sexual preferences, etc, to succeed. Providing for the general welfare and equal opportunity are what this nation is all about. A fiscal conservative might point out that the cost of providing free quality education for a country with a population of 310 million would be considerable - even for government standards. However, the returns on an investment of this nature are guaranteed to outweigh the cost. There is practically no risk. If you have more Americans in higher paying jobs then you get more tax revenue from those Americans. Granted, we couldn't have everyone go to Stanford or Yale, but even a community college education is better than just a high school diploma. It's not like this hasn't ever been done before; most countries in Europe have mostly free tertiary education and California will also pay for the first two years of schooling beyond high school. In order to keep up with other western democracies the United States needs a better educated populace.
