The cost of obtaining a college education is moving out of reach for many Americans. Representative John Boehner's (R-OH) proposed change to the Higher Education Act, which will slightly increase loans to students while they are in college but will eliminate consolidation of student loans at a 30 year fixed interest rate, will not quench the college cost crisis, but will further fan the flames.
U.S. secondary education tuition rose 32 percent between 1992 and 2002, according to nelliemae.com. In 2002, according to National Center for Education Statistics, the average undergraduate graduated $18,900 in debt, an increase of $7,500 in just five years. Thirty-nine percent of undergraduates receive some sort of federal financial aid. As college becomes more expensive, the student body is becoming more homogenous by category of class.
Rep. Boehner's plan will raise current federal student loan limits about $1,000 per year. This cost will be covered by no longer subsidizing interest payments on loans that students in the past have reconsolidated under a federal program that locks the interest rate for 30 years. This plan makes sense if you do not think past the end of the year. Interest rates are low now, but when they return to typical or even higher levels, students will save thousands of dollars if they are able to reconsolidate loans at rates subsidized by the government -- far more than they would save if yearly loan ceilings are raised but the interest rate is not fixed over the long run.
The real reason that the Republicans are pushing this change is common to this administration -- supporting big business. The initiative to end the student loan consolidation program came from Sallie Mae, the largest student loan financer, which wants to protect its profits. Low interest rates on student loans protected by the government are hardly profitable for lenders.
America has been unique because it is an open society, one in which people have the opportunity to move up the class hierarchy. A college education is one of the vital ingredients. Social class in universities across the country is becoming less diverse, while diversity in almost all other measures is increasing. There are many causes for this homogenization; one of the most significant is the increasingly prohibitive cost.
To protect the American value of social improvement, universities absolutely must adopt need-blind admission policies. The wealthiest universities should go one step further and follow Harvard's lead by providing complete financial packages to students from lower-class families. The Federal government has an obligation to protect students' right to an affordable education. And students must stay informed and search for the real reason behind any proposed change to the Higher Education Act.
