Ed. Note: Chanda Kropp is a high school Spanish teacher in Hutchinson, Minn., and a 2010 Mom Congress Delegate. Here she shares her impressions from a recent town hall in Minneapolis.
I must admit, the thought has crossed my mind many times of how my children will ever afford college with the current tuition rates. My dream is that my two wonderful children will attend the college of their choice, whether it is a public school, a private school or a school with out-of-state tuition. As a teacher, I value education and believe it opens so many doors. However, if reality means that a college student’s loan repayment is as much as her mortgage, I worry!
My concern changed to optimism last week as I sat with many South Minneapolis high school students, the Secretary of Education Arne Duncan, Minnesota Senators Amy Klobuchar and Al Franken, Minneapolis Mayor R.T. Rybak and many other distinguished local dignitaries for a town hall on college affordability. Hearing Secretary Duncan say that $40 billion dollars is currently being invested in Pell Grants and that the administration wants to expand its income based student loan repayment program, makes me incredibly happy!
A recent law signed by President Obama allows new borrowers who receive student loans after July 1, 2014, to cap their student loan repayments at 10 percent of their discretionary income. If the borrower keeps up with his or her payments over time, the balance will be forgiven after 20 years. Public service workers – such as teachers, nurses, and those in military service – will see any remaining debt forgiven after 10 years. Additionally, the administration is proposing to move up the 2014 start date to 2012 for some borrowers.
I’m hopeful that the combination of Pell Grants and reasonable loan repayment schedules will be a winning formula for all students in America. The United States once led the world with the percentage of students attending college; we have now slipped to 16th place. That simply will not be acceptable if we want to compete in a global market. America’s children should be concentrating on their academic degrees, not their degree of debt!
Chanda Kropp
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and the word needs to get out that the most expensive colleges are not always the ones that will cost a student and family the most! Our daughter graduated from Dartmouth with only $8000 total debt, and we are not a rich family by any means (annual income approx 75,000). It would have cost much more for her to attend a state university! It’s very important to investigate a school’s financial aid program before writing it off as “too expensive”.
I believe that the investment should be made in ourselves if we are going to build up debt. However, there should be some retraints in place to ensure that this method is not being abused by those who are not seriously pursuing their education. I always fear the result of placing people in debt but I believe that for every issuance of benefit, there should be a return on that investment. So if we waive the loans after a student has paid for so many years, the field that he or she is working must be of direct benefit to the public. But they would have to commit to the position for a period of time in order to reap the benefit of the bailout. I’m not talking a 5 year timeframe either. I want 15 years minimum of employment in that field. I agree with the bailout but have something in it for the public to benefit from as well.
The problem with IBR is that it is a bailout, encourages more borrowing and assumes that all student student borrowing is necessary, improves earnings potential and is done in good faith. Seeing this from the inside, most student borrowing is used to pay bills outside of college (“room and board” and “personal”, i.e. credit card debts, car loans even mortgage payments for online, night and weekend MBA students for example). The students with the highest debts get that way by taking the bare minimum class load, repeating dropped courses, pursuing second and third degrees to endlessly defer their loans while borrowing the maximum amounts and pay non-education related expenses with the difference. With IBR they might as well, because they won’t have to pay it all back. Once they’ve exceeded their ability to repay their debts, why should they stop borrowing? I wonder how long it will take before we recognize the cost of this back door bailout?
I would just like to know how college is going to be more affordable for students that must obtain private loans for fund their education? My oldest just graduated in 2011 and was able to obtain private loans from Sallie Mae at a 3.5% interest rate with deferred payments. Now my middle child is attending college and the interest rates on deferred student loans from Sallie Mae is 9.125%. That means the costs to borrow funds for college attendance have almost tripled! How do you expect more students to attend college when less will be willing to commit to so much debt?