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The Student Loan Debt Blog: A Blog About Student Loan Debt and Student Loan Consolidation

Student Loan Debt

A Blog About Student Loan Debt & Federal Student Loan Consolidation

Thursday, October 16, 2008

EDITORIAL: Just Because College Is Expensive, It Doesn’t Mean That You Shouldn’t Have To Pay For It.

student loan debtAs I was listening to The Rush Limbaugh Show yesterday, I heard a sound byte of Senator Obama and a young college student who was a little disgruntled about the cost of her education. Obama agreed that what she was experiencing wasn’t fair, and of course, went on to give his typical encouragement blurb about change, hope, or what have you. Limbaugh came back to rant about how Obama doesn’t think that people should have to pay for higher education because he is a socialist. Thoughts of my own mountain of student loan debt soon drowned out the radio, and I found myself sincerely contemplating the issue.

Was Obama right? How much should I have to pay for higher education?

Just to be sure Rush’s argument wasn’t unfairly slanted, I checked Obama’s position on his website, www.barackobama.com. His official stance on higher education costs read as follows:

...Obama and Biden will make college affordable for all Americans by creating a new American Opportunity Tax Credit. This universal and fully refundable credit will ensure that the first $4,000 of a college education is completely free for most Americans, and will cover two-thirds the cost of tuition at the average public college or university and make community college tuition completely free for most students. Recipients of the credit will be required to conduct 100 hours of community service...

Low to middle income families would surely welcome such policies, and for good reason. According to the U.S. Census bureau, the cost of postsecondary education has more than doubled since 1990. Faced with today’s gloomy economic climate and grim future, parents and students are crying for relief. Obama promises to educate high school graduates for 1/3 of the cost of tuition.

But is that his job?

While the tax credit sounds great to those who qualify for it, it should worry Americans who do not, because they will be the ones paying the bill. With Obama appeasing the American middle class by promising to increase the tax burdens only on Americans making more than $250,000 a year, this wealth redistribution system essentially boils down to the “rich” and the government taking care of the “poor”.

Is that really fair?

Others argue that the cost of a student’s college education should only be negotiated by two parties - the college and the student. This could be viewed as a free-market approach to education. While some insist that private institutions not backed by the government only serve the rich, the opposite is true. Harvard University has plans to increase student aid this year in a grand effort to subsidize tuition so that more deserving students can afford to attend. This is a good example of a private institution compromising with students to accommodate the changing economic climate.

Whether you like Obama’s plan or not, the truth is that the U.S. government already offers generous student loan programs that empower millions of Americans to pursue higher education while contributing to the American economy. While we hate to pay back the student loans that seem to multiply exponentially as soon as you sign on the dotted line, we enjoy the professional positions that we are able to pursue as a result of our advanced education. Furthermore, the interest goes to help fund the government that provided the initial loan. This allows students to pay their own way through college without having to offer collateral or pay out-of-pocket. Is that not more than fair?

Just because college is expensive, it doesn’t mean that you shouldn’t have to pay for it.

My parents knew that they would not be able to afford to pay all of our college tuition, so they told us to study hard and apply for as many scholarships as we could. They took out loans to cover some of the difference, and so did we. That’s life. Otherwise, we would have either had to put off going to college until we could acquire the necessary savings and credit or pursue other options. This approach to funding higher education wasn’t pleasant, but it was most certainly fair. It’s fair because the return on the investment has the potential to be exponentially higher than the investment itself. If I owe $100,000 in student loans but I make $150,000 per year, the investment pays off substantially. Unfortunately, since great jobs are not guaranteed, college education is a risky investment. That doesn’t mean, however, that if you come up short that it wasn’t fair because the cost of the education was too high. You might then be able to requisition the government to bail you out because you lost money pursuing gain that did not pan out for you.

Wow; that sounds eerily familiar…

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Anonymous Anonymous said...

That's an extraordinary position to take. At a time when the world is crying out for more engineers etc, we need more people to attend college. It should be a major priority, as these people are the creators of future economic growth.

No one is talking about "not paying". The idea is to reduce the burden so it is not prohibitive or a barrier.

Thursday, October 16, 2008 6:10:00 AM  
Blogger cube said...

Speaking as a person who paid her way through college, I am of the opinion that besides helping my own children, I shouldn't have to pay for others to go.

There are plenty of scholarships, grants, and loans out there for anyone who needs them.

I say, tell NObama the socialist to stay out of my finances.

Thursday, October 16, 2008 12:13:00 PM  
Anonymous Student Loans said...

India and China are graduating talented engineers at a very fast clip these days. How is America to remain competitive in an increasingly globalized world? Not like this (from this website's FAQ):

--> Back in the early 1970's, grants -- education-related financial assistance that doesn't have to be paid back -- made up about 80% of the typical student's financial aid portfolio, with 20% coming from student loans. Vice-versa for 2002-2003: according to a recent study by Nellie Mae, the reverse is now true.

--> About 40% of college graduates who want to go on to graduate school but end up not going claim that student loan debt was a major factor that influenced their decision not to go.

Thursday, October 16, 2008 9:00:00 PM  
Anonymous I.C. Jackson said...

I believe that Americans aren't competitive in today's globalized world because public primary and secondary education is not preparing students for college or the real world.

If students were better prepared for college, more scholarships could be given to needy students. Students who are paying their way through school wouldn't be flunking out and giving up because freshman and sophomore level college course work is too hard. If American students were simply better students, they would understand that postsecondary education is designed to help them progress in careers and become leaders, not just to give them access to "good jobs".

Drastically reducing the cost of college tuition would only further defile American students' warped ideas and attitudes concerning the importance and purpose of college education. They aren't globally competitive because they simply don't take it seriously enough.

Thursday, October 16, 2008 9:19:00 PM  
Blogger Daedalus said...

Wow, really, just wow. I sure hope the impending depression caused by American greed hurts enough selfish people for them to realize that we can't make it as a nation without helping each other.

Obviously, college isn't helping even with the available loans. There certainly are a lot of people out there with university degrees who are dumb as all f...

Friday, October 17, 2008 9:41:00 PM  
Blogger kheimbuch said...

This site recommends something called Income Contingent Repayment, I wonder if this is for real? I owe 37k. is there an age limit to income contingency?


Thursday, January 08, 2009 2:02:00 PM  

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