The Cost of College. Is the Price of Higher Education Worth Paying? Yasmine Byungura, Tessa Wood Introduction

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1 The Cost of College Is the Price of Higher Education Worth Paying? Yasmine Byungura, Tessa Wood Introduction For decades, oncoming generations have been taught that the key to a successful, happy, and prosperous life lies behind a diploma from a college or university, and that anyone who has received any form of higher education should have minimal issues in finding a stable job and career path. However, entrepreneurs such as Steve Jobs, founder of Apple, and Michael Dell, founder of Dell, who never completed any form of education after high school but still managed to make millions, have led many students across the country to question whether or not a college education is actually vital to success. In addition to this, the Huffington Post reported only two years ago that 57% of unemployed workers had in fact attended college, therefore proving that paying for a college education that can put graduates thousands of dollars in debt does not necessarily guarantee a desirable job or career. In this committee, delegates will discuss how to make college a more affordable and attractive investment for students in order to ensure that America retains its edge in education. History and Explanation of the Issue One of the largest providers of financial aid in America is FAFSA (Free Application for Federal Student Aid), which is an office of the US Department of Education that is responsible for being the largest provider of financial aid for college students in America, and offers more than $150 billion in federal grants, loans, and work study funds each year to more than 13 million students paying for college or career school. However, as college tuition continues to rise across the nation, the number of people receiving financial aid and the amount of money FAFSA is able to provide is decreasing each year. According to College Board, over the 30 years from 1985 to 2015, average published tuition and fees at private four year institutions rose by 146% and the average published price at public two year colleges rose by 150%. Not only this, but FICO also reports that the size of the average student loan in 2005 was $17,233 and by 2012 the average U.S. student loan debt climbed to $27,253 a 58% increase in just seven years. However, as author Bill Zimmerman describes in his book, The Student Loan Swindle: Why It Happened Who's To Blame How The Victims Can Be Saved, despite its huge impact, as recently as the late 1980s there was no student loan crisis. The crisis came in later years when the cost of getting a higher education rose many times faster than the overall cost of living. To make matters worse, wages were stagnant and the real purchasing power of working Americans was in decline during much of this time period. It is statistics such as these that intimidate students and cause them to rethink whether or not attending college and accumulating this much debt is a risk they are willing to take. 1

2 The surge in the cost of college has resulted in a nationally recognized student loan debt crisis. Defaults on federal eduction loans have risen to their highest level since 1995 and current estimates of student loans in default total over $146 billion dollars. This has resulted in what some economist are calling a student loan bubble. This is particularly troubling economically as college tuition continue to rise and students are more enticed to take out student loans by the notion that the federal government can make debt more affordable. As students continue to accumulate debt with payments equivalent to house mortgages, the economy will suffer significantly as disposable income will decrease among those lucky enough to find employment. The bubble will also result in a weakened job market as employers will be less likely to higher new employees in a weaker economy. While some argue that the current student debt bubble will not result in an economic collapse, similar to the recession of 2008, the issue at hand needs to be dealt with promptly before America experiences serious economic consequences. Liberal View Focus of Debate Liberals generally encourage both private and public colleges/universities to keep tuition as low as possible. In fact, to help keep a college education within reach for every student, Democrats saved more than $60 billion by removing banks as the middlemen, making investing in students a better and more direct process. To make college affordable for students of all backgrounds and to confront the loan burden our students shoulder, Democrats also doubled investment in Pell Grant scholarships and created the American Opportunity Tax Credit worth up to $10,000 over four years of college. Liberals also continue to create avenues for students to manage federal student loans at payments of only 10% of their total monthly income. Conservative View Although conservatives agree that the increases in student debt are unacceptable and should be addressed, they have different methods in dealing with the issue. For example, conservatives believe loans should no longer be given at a federal level, and private loans should instead be prioritized. Many Republicans have also spoken out against President Obama s recent vow to make the first two years of community college free for students, with conservatives such as Speaker of the House John Boehner stating it seems more like a talking point than a plan." Presidential View As stated in an article in The Washington Post, President Obama has pledged to encourage colleges to keep their costs down by reducing federal aid for those that do not, investing in colleges that keep tuition affordable and provide good value, doubling the number of work study jobs available to students, and continuing to ensure that students have access to federal loans with reasonable interest rates. Obama even stated as recently as January 8th of this year that he proposes free tuition for students to attend two years of community college. The White House, which estimates that 9 million people a year could benefit from the program, says it wants community college to be as "free and universal" as high school. In order to qualify, however, 2

3 students must attend class at least half time, maintain a 2.5 GPA while in college, and make steady progress toward completing their program. Higher Education Act of 1965 Past Legislation This law was intended to strengthen the educational resources of our colleges and universities and to provide financial assistance for students in post secondary and higher education. It increased federal money given to universities, created scholarships, gave low interest loans for students, established a National Teachers Corps, and now enables FAFSA to provide financial aid to college students across the US. Students Emergency Loan Refinancing Act Under the terms of the bill, a graduate who borrowed the national average of around $30,000 through unsubsidized federal loans to pay for their undergraduate education would save more than $4,000 in interest payments under this legislation; an individual borrowing $40,000 for a graduate degree would save more than $2,500 in interest payments; and a family who borrowed $50,000 to pay for their child s education would save more than $3,500. In other words, the act allows borrowers to refinance their federal and private student loans at market based rates from Student Aid Alliance Special Interest Groups The Student Aid Alliance supports a package of proven student aid programs to help students achieve their higher education goals without excessive debt. These programs include Pell Grants, campus based programs (Supplemental Educational Opportunity Grants [SEOG], Federal Work Study, and Perkins Loans), Leveraging Educational Assistance Partnerships (LEAP), Federal Student Loans, Federal TRIO programs, GEAR UP, and graduate programs. Complete College America Complete College America, established in 2009, is a non profit research and advocacy group focused on increasing the number of Americans with college degrees of genuine value in the marketplace, especially among underrepresented populations. Complete College America emphasizes policy change at the state level. NAGPS Student Financial Aid Crisis Page The National Association of Graduate and Professional Students is trying to prevent the federal government from cutting student financial aid. Their web page provides information and advice to people who are concerned about the proposed cuts in federal student aid and federal funding 3

4 of higher education. It also includes NAGPS press releases regarding financial aid, excerpts of news reports, and updates on Congressional activity concerning financial aid. Student Debt Alert Student Debt Alert is a web site run by the Public Interest Research Group (PIRG) to raise awareness of the impact of educational debt. Students can post information about their anticipated educational debt, along with photographs, names, colleges and majors. Possible Solutions Decreasing Government Subsidies for College Tuition As FAFSA is a program funded directly by the government and is the single largest provider of financial aid for students, lowering government subsidies would decrease the amount of money granted to this program for the distribution amongst college students. Not only would this discourage students from wanting to seek higher education,, especially those coming from low socioeconomic backgrounds, but it would also lead to an increase in student loan debt for those who do choose to attend universities. However, decreasing government help would save the government hundreds of thousands of dollars that could instead go to other government expenditures. Increasing Government Subsidies for College Tuition Increasing government subsidies would increase the amount of interest in attending college in students by allowing FAFSA to distribute more money to students who may otherwise not be able to afford it. This would also decrease the amount of student loan debt amongst students after graduation. However, as college tuition continues to rise, the amount of money the government can offer to aid students may not be enough to match these increases, which would just lead to a continuation of the same issues. Directing Resources Towards Public Online Education Systems Some state schools have integrated online courses, which are less expensive than regular courses, into their programs. Directing government resources towards public online education systems would further reduce the cost of attendance, would better the online education system, and would result in the hiring of more dedicated teachers, therefore encouraging students to consider this option instead. Not only would this decrease student debt in the long run by decreasing the number of loans students must take in the first place, but it would also take less money to fund than increasing government subsidies because a portion of the same money used with current government funding would go towards online education systems. However, some students may not find online systems suitable and may be willing to pay more for the traditional college experience, rather than using an online school. 4

5 Reforming College Cost System Ambitious delegates may also seek to reform the actual college tuition itself to solve the problem at its cause. Such a task would involve in depth research and analysis into why exactly costs have risen so much and what some long term solutions are for ensuring that they return to normal. Such a reform system would be looked on favorably by both parties as long as it is feasible and would not cost the government more than other, similar options. 5

6 Bibliography "About Us." Student Aid Alliance. 19 Feb Web. 15 Jan "Average Rates of Growth of Published Charges by Decade." Trends in Higher Education. Web. 15 Jan Douglas Gabriel, Danielle. "There s a Big Catch in Obama s Plan for Free Community College." Washington Post. The Washington Post. Web. 15 Jan Glum, Julia. "Free Community College: Republicans Slam Obama's Proposal For High Cost, Low GPA Requirement." International Business Times. Web. 15 Jan "Republican Party on Education." Republican Party on Education. Web. 15 Jan Snyder, Dr. "The Majority of the Unemployed Went to College?" The Huffington Post. TheHuffingtonPost.com, 22 May Web. 15 Jan Strauss, Valerie. "What Democratic Platform Says on Education." Washington Post. The Washington Post, 4 Sept Web. 15 Jan Touryalai, Halah. "$1 Trillion Student Loan Problem Keeps Getting Worse." Forbes. Forbes Magazine. Web. 15 Jan "Welch Unveils College Affordability Legislation." Congressman Peter Welch :. Web. 15 Jan Zimmerman, Bill. The Student Loan Swindle: Why It Happened Who Is to Blame How the Victims Can Be Saved. CreateSpace, Print. 6