Government Takeover of College Loan Pool in Works
Mara Rose Williams, McClatchy Newspapers
Issue date: 11/11/09 Section: News
"Students are big fans of direct lending," said Amanda Shelton, a member of the Missouri Students Association, which represents the undergraduates at the University of Missouri in Columbia. "But direct lending does not solve the student loan debt problems.
"We would like a lot more grant money, more work study, financial literacy training," Shelton said. "I need student loans, but I have not taken out any because I remain cognizant of the negative reality of student loans - they bind you to find an excellent job out of college, and in this economy that is next to impossible."
For the last 10 years, college costs on average rose faster than inflation. Published tuition and fees at public four-year colleges and universities rose at an average annual rate of 4.9 percent beyond general inflation from 1999-2000 to 2009-10, more rapidly than in either of the previous two decades, according to the College Board.
In this school year - 2009-2010 - four-year public colleges in the U.S. raised the average tuition cost by 6.5 percent to $7,020. At private colleges, tuition went up by an average of 4.4 percent to a cost of $26,273 - at a time the consumer price index had gone down.
Letting the government federally guarantee student loans was advocated by President Barack Obama.
Now some 3,000 colleges across the U.S. are gearing up to make the switch.
Proponents estimate saving more than $80 billion over 10 years by eliminating the federal subsidies paid to private lenders. They say the money should go into college funding and more grants to students - raising the maximum Pell Grant to $5,500 in 2010-2011.
"President Obama has set a goal for America to once again have the highest proportion of college graduates by the end of the next decade," Duncan said.
"To get there, we need to increase college access and do a much better job at helping students stay the course and complete their college education."
The proposed legislation would provide a variety of flexible repayment options. And more grant money is promising, too.
"We would like a lot more grant money, more work study, financial literacy training," Shelton said. "I need student loans, but I have not taken out any because I remain cognizant of the negative reality of student loans - they bind you to find an excellent job out of college, and in this economy that is next to impossible."
For the last 10 years, college costs on average rose faster than inflation. Published tuition and fees at public four-year colleges and universities rose at an average annual rate of 4.9 percent beyond general inflation from 1999-2000 to 2009-10, more rapidly than in either of the previous two decades, according to the College Board.
In this school year - 2009-2010 - four-year public colleges in the U.S. raised the average tuition cost by 6.5 percent to $7,020. At private colleges, tuition went up by an average of 4.4 percent to a cost of $26,273 - at a time the consumer price index had gone down.
Letting the government federally guarantee student loans was advocated by President Barack Obama.
Now some 3,000 colleges across the U.S. are gearing up to make the switch.
Proponents estimate saving more than $80 billion over 10 years by eliminating the federal subsidies paid to private lenders. They say the money should go into college funding and more grants to students - raising the maximum Pell Grant to $5,500 in 2010-2011.
"President Obama has set a goal for America to once again have the highest proportion of college graduates by the end of the next decade," Duncan said.
"To get there, we need to increase college access and do a much better job at helping students stay the course and complete their college education."
The proposed legislation would provide a variety of flexible repayment options. And more grant money is promising, too.
Viewing Comments 1 - 4 of 4
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posted 11/10/09 @ 3:01 PM MST
Quote:
"The balance of outstanding federal loans assumed by students or their parents continues to grow. By 2007-08, two-thirds of four-year undergraduate students had some debt along with their degrees. (Continued…)
bjtstarks
posted 11/13/09 @ 8:38 AM MST
A. The Student Aid and Fiscal Responsibility Act is 181 pages long.
What extra's are included in this act? And, how many congressmen actually read it?
B. (Continued…)
olivia
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posted 12/05/09 @ 5:53 AM MST
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posted 12/30/09 @ 9:09 PM MST
Colleges that once kept a long list of lenders are converting to the Direct Loan Program, in which student loans come directly from the government.
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