As the editors of the Loquitur sat down to discuss the editorial topic of the week, financial aid, most seemed to draw a collective blank. Only three editors could give a strong opinion and even they admitted the situation wasn’t black and white. Paying off student loans is inevitable. We should have a better understanding of the key points that will have a greater impact on our wallets.
Why don’t we have a better understanding? Is it partly because the loan programs are so complicated?
Sen. Hillary Clinton’s plan would add $8 billion a year in new funds in tuition tax credit, increase Pell Grants, provide $500 million in grants to community colleges, create a “Graduation Fund,” increase the education award in the AmeriCorp program, and simplify the application process for federal financial aid. Clinton’s plan would also require public colleges to publish information about employment rates and earnings of their students after graduation, eliminate the guaranteed student loan program, and require colleges to set multi-year tuition rates. Both candidates plan to eliminate the Family Federal Education Loan Program and replace the loan program with the government’s Direct Loan program.
The Federal government makes loans available to us in two ways, through the Direct Loan program, or funneled through private lenders like banks and companies like Sallie Mae. The Direct Loan program has lower rates and more of the money can actually go to students. The government loans funneled through private lenders sends a smaller percent of money through to students because of higher fees the banks and companies collect from the government.
Admittedly, some people think the marketplace is better than the government for everything. We understand that fear, but in this case, it’s been shown clearly that companies like Sallie Mae have violated our trust and that the government actually is a better lending source.
Although the editors agreed that colleges should release information on graduation, job placement and earning rates after graduation, we think that if the government tries to make us better consumers, it should work hard to develop an accurate system.
Every year at Cabrini the cost of tuition increases by a few thousand dollars. Clinton’s plan requiring colleges to set multi-year tuition rates would allow for students and their families to better financially plan. Some fear that if allowed, the government would start imposing policies on all businesses. Yet, students find it frustrating that year after year tuition is increasing and we aren’t necessarily getting a better education.
Clinton’s plan to simplify the process of applying for federal financial aid by checking a box on your federal income tax returns and in return the Educational Department would provide you with how much you can expect to receive in federal grants and loans seems like an answered prayer to the complicated process.
After studying the financial aid program of Clinton, we can come to a few conclusions. One is that this is an important topic. We ourselves are embarrassed how little we knew going into this. We are also surprised at how little attention higher education gets in this campaign. Why are Clinton and Obama the only ones to have any plan at all? Why has it not come up in any of the debates? Do the other candidates and the reporters who ask the questions not think affordable higher education is important to the future?