In an effort to garner and retain the youth vote that won him the election in 2008 Barack Obama has made extending the College Cost Reduction and Access Act, which lowered the interest rate on federal student loans from 6.8 % to 3.4 %, a priority. The law expires in July so this past week Obama has been making speeches at colleges and universities across the country in an effort to gain support for the act. There is opposition in the right wing in Congress because extending the act would cost about $6 billion.
I have yet to agree with the views by the candidates in most of the issues leading up the GOP presidential nominee race. I don’t agree with how women’s rights are debated, opposition to the Dream Act is a joke and Gingrich’s delusions of pouring tax dollars into a dying space program is just dense. The key point of the likely GOP candidate Mitt Romney’s platform is lowering the deficit and improving the economy. One way the government could stimulate the economy would be to lower interest rates for student loans. This in turn would help those with degrees who are struggling financially. The money saved would come back find its way back into the economy like a constant feed back loop. Or, if Mitt Romney really wanted to help the economy he could suggest we could stop giving tax breaks to the rich or stop spending $250 million/day on a senseless war.
Keeping student loan interest rates low is very important. I have eleven years of education post high school under my belt with no student loans. I was fortunate to receive a full academic scholarship and have the federal government pay me to receive my graduate degree. In contrast, I have plenty of friends who received their MD, DDS or JD recently and they graduated with $250K+ of student loan debt. I have no idea what my life would be like if I had that much debt. I might cry. Forget paying the principal; imagine the interest on monthly payments of a loan of that amount. Its almost as if we are penalized for educating ourselves and the more education we receive, the harsher the penalties.
Entrepreneur, author and motivational speaker, Jim Rohn once said “Formal education will make you a living; self-education will make you a fortune.” Based on the current trend of tuition rates doubling since 2000 (10 percent increase each year) I’m not too sure about the former part of that quote . The average amount of debt for a bachelor’s degree is $24,000 but 16 percent of blacks holding a bachelor’s degree graduates owing more than $40,000 in loans . This is particularly troubling to me because as I’ve said I don’t have any student loans but this may affect my life in more than one way.
More than likely I will marry a woman who has an advanced degree and it is possible that she will have student loans. As I mentioned earlier its not uncommon for a student who possesses a MD/DDS/JD to graduate with more than $250K in loans. When we get married her debt becomes my debt. Considering we’ll have a mortgage, car payments and costs associated with children the less we’ll have to pay in student loans the better. Also, I would like to think that I will be a responsible parent and establish a college fund that my wife and I would put money into but by the time our children are old enough for college we may be praying for scholarships.
What is your opinion on the College Cost Reduction and Access Act? Do you think that the federal government should foot the bill to give relief to college graduates who are struggling to make ends meet?