Cuts Vs. The Status Quo: How Will Elections Affect Your Student Loans?
In the wake of NBC’s Education Nation Summit in NYC, the New York Times conducted an interview with Mark Kantrowitz, publisher of Finaid.org. As an expert on student loans and related policy, Kantrowitz was asked to clarify the candidates’ stated positions on those areas. With this information in hand, students can be more aware of what they’re voting for when it comes to higher education. Here are the highlights of how Kantrowitz thinks the upcoming election will affect student loans.
1. Cuts vs. the Status Quo
To start with, Kantrowitz makes clear that neither candidate has expressed plans to drastically increase spending for financial aid. However, the Obama administration has recently made several improvements to the federal Income-Based Repayment plan as well as steps to help borrowers move toward loan forgiveness. If elected, Mr. Romney plans to repeal those improvements, as well as increase the role of private lenders. President Obama’s plans are to preserve the existing programs, while working to make small adjustments to improve them.
2. Regulation of For Profit Colleges
The Obama administration supports and has implemented increased regulation of for profit colleges. These regulations require schools to be more geared towards gainful employment and to honor affordable debt restrictions or risk losing federal funding. Mr. Romney opposes such regulations.
3. Pell Grants
The Pell Grant program is incessantly imperiled; there are budgetary issues that make it vulnerable regardless of the outcome of this election. However, President Obama supports raising the grant’s maximum by $85, to $5,635, while Mr. Romney proposes maintaining the current maximum.
4. Any Overlap?
Both candidates agree that the rising cost of education is a problem for students and their families and that something must be done about the situation. The difference of opinion is over how to approach the issue. Both candidates agree that students need to be better informed about how to get the best value out of higher education and how this interacts with personal finance.
The candidates disagree over what the relevant data is that should be passed on to prospective students. Based on Kantrowitz’s remarks, it looks as though Mr. Romney’s proposed data is a little friendlier to the concept of students taking on debt.
5. The Future Of Higher Education
As to the future, Kantrowitz paints a decidedly bleak picture. Regardless of next month’s elections, he feels that higher education is likely to become increasingly unaffordable with grant programs like the Pell Grant unable to keep up with inflated tuition costs. He fears that this will keep low and middle-income students out of college. Kantrowitz also believes a lot of undue faith is and will be placed in the power of e-education; he feels in-person interaction is currently crucial to a good education.
One might argue that the overwhelming unknowable nature of what will happen even in the near term provides a foil to Mr. Kantrowitz’s grim predictions. In regard to online education, for instance, changes in technology, with subsequent changes in our own synapses, happen so quickly that it’s impossible to say what’s in store. In the meantime student debt management is far from hopeless; students can rely on solid debt management to keep them out of harm’s way with respect to student loans. There’s a lot to be said for having the courage to look forward, not with blind faith, but with a healthy respect for fear, with a willingness to leave our comfort zones and see where this journey into the undiscovered country can lead us. Negativity can be oddly seductive, but as a worldview it is unworthy of our great capacity for innovation.