Fifty years ago college was a luxury. Back then, you could still graduate from high school and get a good paying job that would guarantee you a place in the middle class. Those days are gone.
A postsecondary education is the ticket to economic success in America. We know that the jobs of the future will all require some kind of education or training after high school.
And while it's never been more important to have a degree, a certificate or an industry recognized credential -- it's also never been more expensive.
Since 1995, college costs across the country have risen almost five times faster than median household income. As a result, students and their families are taking on more and more debt. Borrowing to pay for college used to be the exception; now it's the rule.
Next month, millions of America's newest college graduates will leave school to enter the job market. As they do, a new challenge awaits many of them: how to pay back the student debt they've accumulated over the last four years.
About two-thirds of bachelor's degree holders borrow to go to school, and on average they're graduating with more than $26,000 in debt. In an economy still recovering from the worst downturn since the Great Depression, paying off a sum that large can be a daunting.
To make matters worse, a policy change is coming that will make getting out of debt more expensive for over 7 million young Americans: without Congressional action, the interest rate on subsidized Stafford loans is set to double from 3.4% to 6.8% starting July 1, 2012.
Based on the average loan amount, doubling the subsidized Stafford loan interest rate will add more than $1,000 in total costs. For students who borrow heavily to go to college, it could cost even more. Only Congress can keep these interest rates from doubling.
This week, President Obama traveled to universities across the country to call on Congress do its part to keep college affordable by stopping student loan interest rates from doubling this July. With so many students struggling to both make ends meet and afford the skyrocketing price of a college degree, now is not the right time to heap more costs on top of them.
As we work to get the economy back on track, no one is suggesting it would be a good idea to double interest rates on credit cards or home mortgages. Why then do some believe it's a good idea to double interest rates for students?
We all have a role to play -- the President, Congress, parents, students and schools -- in making college affordable and keeping the middle class dream alive. Our Administration is continuing to do its part: despite being in one of the most challenging budget environments in history and cutting almost all-domestic spending across the board, President Obama is increasing the investment in higher education.
The Obama Administration is providing billions of dollars a year in aid to needy students through Pell grants and helping students to better manage their debt after graduation with programs like income-based repayment and public service loan forgiveness. The President is also proposing a number of initiatives that would continue to make college more affordable, including doubling the number of work-study jobs within five years; making the American Opportunity Tax Credit permanent; and providing new incentives for states and institutions to keep college costs from escalating.
President Obama cannot -- and should not -- do this work alone. In 2007, a bipartisan majority in a Democrat-controlled Congress and a Republican president came together to lower interest rates on these loans because it was the right thing to do. This is not about politics. It's about doing right for America's students - and for our nation's economy.
Now Congress has an important decision to make. Do they double interest rates for Stafford loans, adding more debt to students already struggling to make ends meet? Or do they invest in the future by helping to keep interest rates where they are? For me, the choice is clear. We have to educate our way to a better economy. And as President Obama has stepped up to meet the challenge, I hope leaders in Congress will step up as well.
Follow Sec. Arne Duncan on Twitter: www.twitter.com/ArneDuncan
You have a NEW fan in your corner!
This is disingenuous, and seems designed to benefit banksters and for-profit diploma mills.
Arne--Do you really have our children's interests in mind when you write asinine articles like this?
Most of the big name universities are privately run, and they make absurd amounts of money every year, FAR beyond the ACTUAL costs of the education. They claim their graduates have such and such rate of employment after graduation not adding that in many cases that job isn't in their field of study, and may well be working checkout at the supermarket, even in fields you where you would expect more jobs, like engineering and healthcare the competition for ANY job is so intensely fierce it may take months or years to gain even an entry level position.
What do you do in the meantime to pay the massive loan payment every month for the education you were promised was the golden ticket to a wonderful well paid future? 10 years ago the average age for the local barista was 17 years old. It's now 27. And I'd venture to say most have a B.A.. The opportunities just aren't there!!
What is wrong with you people? Education should be cheap and readily available, not subsidized so everyone is in debt for the rest of their lives.
"Liberals" know not what they do.
With credit cards you're half right. Rather than ask the rhetorical question about doubling interest how about speak of really bring back usury law? Or with home mortgages, I realize you've probably never had 1099 income or schedule se income as your main source, but for those of us who do - low mortgage rates are illusory.
Big College has the largest monopoly in the country and they're using it to their advantage.
It seems to me that the problem is skyrocketing college costs. Why isn't something being done to crack down on these outrageous tuition charges? If all you are doing is subsidizing student loan rates (and then even talking about "forgiving" the loans entirely), you are simply creating an environment where there is no incentive or mechanism for controlling costs. If people have "skin in the game" you have some hope of controlling costs.
By all means, talk about skyrocketing costs, but don't make life harder for students while you're trying to find an answer.
Because we are inflating another bubble.
These students should also get subsidized housing and meals while they attend school.
The government should also give them free computers and internet to study with.
A car to get around in would also be expected.
Healthcare should also be free for them (including birth control, abortions and viagra).
With that being said, substitute the words, free and subsidized with the phrase "taxpayer supplied".
Please stop reaching into my pocket to get money for other people when I can barely get by.
Stop giving away money that's some of us work very hard for.
Here's a couple hard lessons for students:
Take out a loan and pay it back.
If a school is too expensive, go to a different one.
If you need money, get a job, do work study or skip a year of school to save for the next year.
It's the American way.
We need new models of teaching and learning that address the needs of students to become critical thinkers who can communicate and work in a team, as well as master content. One such model that exists is Peer-led Team Learning, where students who have done well are recruited to become peer-leaders who will lead small group of students in problem solving and discussion as an integral part of the course. Data from 20 published studies show an average +15 percent success rate for students, compared to traditional lecture. This model only requires one lecture a week to be converted to a peer-led workshop, so that students start to take ownership of the material by directly participating in the course instead of sitting passively in lecture.
This is described at the PLTL web site: http://www.pltl.org.