In Congress, the debate has centered around student loan interest rates. At the end of this month (June 2012), the interest rate on Stafford federal student loans will expire to resume an increased rate of 6.8%. The rate, currently 3.4%, had been initially set as a temporary reduced rate in 2007 and was intended to resume the higher rate 6.8% in 2011 (extended to begin July 1, 2012). Congress has been in a tumult of political foreplay and impasse about interest rates for federal student loans. Just yesterday, President Obama has reportedly placed new pressure on Congress to keep student loans at a low interest rate.
All of this points to a bigger question of the purpose and viability of a college education. What is the purpose of a college degree? Should students go straight into the workforce after high school or should they attempt postsecondary education no matter the costs? Certainly these issues are not new. What has changed though is the economic environment that students are now faced with, and the associated pressures of debt, unemployment and/or partial employment. Not to mention the increase in students not graduating or taking longer to graduate and thereby accruing more debt. The stakes in other words are much higher.
Given this heightened context of economic crisis, now translated into student crisis, what can we say about the financial aspects of a college education? Is it worthwhile for a student to take on this much debt? Will what the student losses be recouped in income and more intangibles, such as cultural capital and socio-economic standing? Re Naush’s post yesterday, does this change how we approach public versus private education?
Finally, what is the purpose of a college education? As educators, how does this impact the way we teach and approach college preparation?
Other Links:
Wall Street Journal statistics on unemployment, college
educated, and student loans: http://blogs.wsj.com/economics/search/student%20debt/?s=student+debt
Economist Gary Becker’s discussion on student debt:
National Journal Education Experts Blog discuss debt:
Challenge to Care in Charm City: previous blog posts have made some insightful discussion points
and sources about the question of student debt: http://bmorenotless.blogspot.com/2012/03/are-baltimore-students-degreeless-in.html
Baltimore Sun:
More Baltimore Graduate Attend 2 Year College Where They are Less Likely
to Earn Degree
2 comments:
I agree this leaves a heavy burden amongst those making a choice to decide to apply for higher education. If interest rates increase how will many even those who come from affluent areas will pay for tuition that gradually keeps increasing in a society that has emphasis on higher eduation requirements for jobs.
I feel this leaves a heavy burden for students to decide if a college education is worth the debt. At the end of the day, we as educators and need to advise stduents on ways to get around the debt (scholarships that are available and not taken advantage of, grants) that can cut down on the financial burden of getting a high level education. The interest need to be kept low if having to take on a loan for the simple fact that jobs that once required a bachelors degree are now requiring a Masters and even PhD. Higher education if required to get jobs that a decade ago only required your basic four years. And with the new laws passed all loans ( educations, etc.) will stay on your credit report even after they have been paid off in full. Which would come off when fully paid but now stay on, I wonder how that would affect a persons ability to gain ownership of a loan for a major asset like a house later on. Everythign has a price but with education tuition rising something has to give.
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