Education advocates say a college education is important because the gap in income is widening between those with a college degree and those without one. In 2002, a college graduate could, over a lifetime, expect to earn 75% more than a person without a degree. That differential is 84% today. The availability of federal aid determines whether many students can attend schools of higher education. In 2011, the average undergraduate student costs for tuition, room and board at most public universities was about $16,000, while these costs at most private universities were about $33,000. Tuition has increased at a rate of about 6% each year for the past decade, or nearly threefold the rate of inflation. Low-income students continue to fall behind in their ability to access a college education. In 2007, two-thirds of all college undergrads needed some form of financial aid. On average, about half of these students received about $5,000 in grants, while about 40% took out loans averaging about $7,000. In 2013, the average student loan debt for recent graduates was $29,400. Others used veteranâ€™s benefits and parent loans to help pay for their education. During this year, Pell Grants, averaging $2,600, will be awarded to about a quarter of all undergraduate students. The Department of Education distributes Pell Grants, which do not require repayment, and manages other financial assistance programs such as Stafford loans. There were nearly 10 million needy students awarded Pell Grants in 2011 for a total cost of $33 billion.
In addition to the need for increasing the availability of student grants and loans, there is also great need for students to be able to pay these loans off in a timely manner. Due to increasing college costs and stagnant family resources, the average college student now graduates owing about $30,000 in school loans. By comparison, the average student loan debt in 2004 was about $19,000. Recent studies reveal that graduate students, compromising only 14% of university enrollment, now account for nearly 40% of all student debt. Total student loan debt is now about $1.2 trillion, more than our total credit card debt. Even worse, many of these loans carry high interest rates set by the financial institutions which administered the student loan program. Servicing this debt is difficult for grads with lower-paying public service careers, those who are ill or unemployed, or those who failed to complete their degree. Advocates claim many young Americans are unable to afford car loans, home loans and other needed purchases due to student loan costs. These advocates say graduates should be required to pay no more than 10% of their income to service their student loans. They also say the balance of a student loan should be forgiven after 20 years – or after 10 years if one chooses a career in public service.
S.897 & H.R.1979 – Bank on Students Loan Fairness Act
I oppose reforming current federal student aid policy and wish to defeat S.897 & H.R.1979
I support awarding Direct Stafford Loans to all eligible students attending participating institutions of higher education, setting the interest rate on Direct Stafford Loans first disbursed on or after July 1, 2013, and before July 1, 2014, at the primary credit rate charged by the Federal Reserve banks on July 1, 2013, and wish to pass S.897 & H.R.1979