Potential budget cuts jeopardize student access to higher education
Unfortunately, the Higher Education Act reauthorization bill that was passed by the House Education Committee at the end of July goes against these very principles of college affordability and equal access.
This bill, HR 609, cuts almost $9 billion from the student loan programs. It provides minimal increases for grant aid programs and drastically increases the cost of borrowing for students and parents.
Unfortunately, the Higher Education Act bill passed by the House Education Committee in July doesn’t just fail to expand accessibility and affordability of higher education-something we should always be in the business of doing-it actually increases the cost of higher education for students and families. This bill makes the cuts in large part by cutting student benefits, raising interest rates and forcing students to pay new fees to borrow. It also substantially weakens many provisions aimed at protecting borrowers attending for-profit institutions.
These student loan cuts are now being considered as a part of the federal budget bill up for vote this week. If enacted, this budget would institute by far the most vicious and far-reaching cuts ever made to the student loan programs.
Enacted forty years ago, the Higher Education Act was the first concerted pledge by the federal government to make college accessible to and affordable for students from low- and moderate-income families. Over the years, Higher Education Act reauthorizations resulted in innovations such as Pell Grants, AmeriCorps and the Direct Loan program, all of which increased college accessibility, particularly for disadvantaged youth.
A college degree is critical for a thriving democracy as well as a thriving economy. Recognizing that higher education is key to economic stability and enhanced opportunity for American families of low and moderate incomes, the federal government set up the student loan program to increase access and affordability. Proposed cuts to these programs will decrease educational access and affordability at a time when it has never been clearer that American families need that access to leave poverty behind.
The federal education loan programs have played an important role in providing access to higher education for families of all income levels. In recent years, however, as college costs have risen without parallel increases in grant aid, more and more students are borrowing unmanageable sums to finance their education.
Over the last decade, average tuition and fees at public four-year colleges have increased by 10 percent. As a result, according to the Congressional Advisory Committee on Student Financial Assistance, by 2010 nearly 4.5 million high school graduates will not be able to afford to enroll in four-year colleges. Last year, 250,000 qualified high school graduates forwent college simply because of costs.
Due to the dramatic rise in college costs, the current generation of student borrowers has become the first to finance higher education mostly with loans rather than with grants.
From 1992-02 the volume of federal student loan borrowing rose a whopping 137 percent, with undergraduates borrowing, on average, $17,500; graduate students owed nearly $32,000 for their graduate education alone. While many of America’s neediest students rely heavily on loans to finance their education (72 percent in 1999-00, up from 67 percent in the early ’90s), middle- and upper-income students also find themselves increasingly indebted, with 46 percent of children of the richest families borrowing for college in 2000, up from 24 percent in 1992-93. The growing burden of student debt impacts the entire breadth of American society.
Despite the growing problem of student loan debt for many Americans, the House now has before it a bill that would reduce federal student support by billions in order to pay down the deficit by raising the cost of student borrowing. While reducing some of the worst subsidies to the biggest commercial lenders, it carves out anti-competitive advantages for those lenders which will lead to higher borrowing costs.
As for deficit reduction, Jordan Root, president of the College Republicans of the University of Texas at Austin, said he fears that higher fixed interest rates will “take money from poor students” and opposes the cuts because he argues they need “to focus more on students and not on budget reduction.” He went on, “We understand that they’re cutting corners wherever they can [to reduce the deficit]… But I don’t think this is one of those issues you can corner.” Several College Republican units nationwide, including the Young Conservatives of Texas, have even publicly opposed the cuts.
The argument that these cuts must occur to reduce the deficit or reduce spending is penny -wise and pound foolish. While the budget reconciliation process has been touted as necessary to reduce the federal deficit, it in fact increases the federal deficit. The cuts to programs like the student loan programs added together achieve $35 billion in alleged savings. However, they are tied to a tax cut to the tune of $70 billion, thereby passing the balance of $35 billion back into the already swollen deficit, now estimated at $333 billion.
For the sake of America’s next generation of students, it is vital that Congress reject this bill in its current form, and work on legislation that will actually help students’ debt burdens. More than any previous generation, today’s students-America’s future teachers, health care professionals, journalists, business leaders and public servants-depend on loans to pay their way through college. As they embark on their careers and face an uncertain economic future, no one is more concerned about and imperiled by the nation’s rising deficit than today’s youth; but it is counterproductive to force them to bear an undue burden.
Congress should reject these changes, which would increase the average college student’s debt load by as much as $5,800. Furthermore, Congress should divert resources from inefficiencies in the student loan programs. These resources could then be used to increase Pell Grant funding by $17 billion-enough to increase the maximum Pell Grant for many students by as much as $1,000.
While access to higher education is increasingly essential-for both individual as well as societal success and economic security-its attainment is becoming less affordable. Student borrowers are, perversely, penalized for bettering their lot. They are forced to enter the workforce with crushing debt on terms to which higher-earning, more established citizens are not subject. Ensuring reasonable terms of educational access for America’s youth is not only right and fair, it is a prudent investment in the nation’s economic future.
Please urge your congressperson to oppose this proposal. Call 1-800-574-4243 and give your ZIP code to connect to your representative. It takes about 30 seconds.
Simmons can be reached at