President Obama often speaks about how he was able to pay off his student loans in 2004. This provides optimism to current students who worry about being able to balance their loan debts – until they realize that by that point, Obama had been a law school professor, bestselling author and U.S. senator-elect.
Student loan debt remains one of the biggest social plagues afflicting the nation, rising higher than credit card debt and washing away the ladders of social mobility. This comes at a time when our knowledge-based economy means that a college degree, or other piece of paper certifying an education, is the only way to ever move out of your parents’ home and find an internship that hopefully leads to a job you don’t hate.
With this looming problem, President Obama recently decided that move-in day at the State University of New York at Buffalo would be the proper setting to unveil new proposals designed to help students and families fight back against college debt. His plan has three components.
First, he wants more refined, performance-based pay to higher education in the form of federal grants and loans. This starts with compiled data on things affecting quality and inclusiveness of education, like four-year graduation rates and Pell Grant percentages, which the government uses to target families in need and increase aid (how exactly it makes those choices isn’t clear). In public universities that have seen state budgets slashed, this move would strengthen the school’s role as a social good.
For the time being, however, it is hard to see how much this effort will affect UM. Pell Grants didn’t even cover one-fifth of the cost of tuition in 2012, so it’s unlikely that expanding these grants alone will increase the socioeconomic diversity of campus. The university’s outstandingly generous financial aid offerings (the average freshman aid package is nearly $35,000) has been much more effective at increasing diversity, as well as raising the academic profile of students.
Second, the President wants to incentivize offering Massive Open Online Courses, or MOOCs, and experimenting with other technology to bring the costs of college down. One focus of this is rightly rewarding students not based on time in school but on graduation benchmarks, to crack down on the epidemic of the six-year graduate and the college dropout. Six-year graduation rates are a serious problem: according to the Chronicle of Higher Education, UM ranked 103rd nationally across all post-secondary institutions, with 80.2 percent of students graduating on time.
Lastly, and likely most promisingly to current students, the plan calls to expand income-driven payments, or Pay As You Earn, for all federal loans. Under this program, which currently applies to five percent of loan holders, loan payments are capped at ten percent of income, exactly as the name suggests. Such a move would help keep debt manageable and would free students to pursue careers in fields that don’t typically pay as well as other lucrative options.
The president’s speech is a laudable step in the right direction, and hopefully, more data will bend the college market toward sustainable directions. But in the end, it’s harsh to remember that, especially at a private university, tuition and costs are dependent on the market instead of the government, and for myriad reasons, the market shows little signs of abating soon.
One of the biggest problems is that implementation for all of this will take time. They’ll start up in 2014 at the earliest, 10 years after the president paid off his debt, and just in time for his daughter Malia to start applying to schools.
Patrick Quinlan is a sophomore majoring in international studies and political science.