Posted on 01/04/2007 3:42:50 AM PST by Froufrou
Incoming Speaker of the House Nancy Pelosi (D-Calif.) has promised to make it easier for low- and moderate-income students to afford college tuition, but some political experts predict the cost of such promises could hurt the Democratic agenda and the very students the party says it wants to help.
The Democratic plan for college tuition, formulated by California Rep. George Miller, would lower interest rates on federally subsidized college loans to 3.4 percent from 6.8 percent.
Lois Rice, a scholar at the liberal Brookings Institution, said in a discussion Wednesday the proposal "is clearly designed to try to ease the burden of paying for college, and that's laudable, but there could be some very severe and probably unintended consequences."
Rice, a former vice president of the College Board -- a non-profit organization that administers college admissions tests and helps students to find financial aid -- said the change would cut the monthly payments on $20,000 debt by more than half, and could save a student more than $4,000 over the life of the loan.
But, Rice said, "lowering the interest rate for students could in many ways encourage greater borrowing." With a lower interest rate, borrowers might be more likely to feel empowered to borrow more money from private lenders, she said, putting them into deeper debt.
Rice questioned whether "simply lowering the interest rates have any positive effect on the behavior of students."
In addition to the potential consequences for borrowers, Rice said lowering the interest rates for federally subsidized student loans would be costly for taxpayers.
"Lowering the costs under the current law to students increases the costs ... that the federal government must pay to the lenders under these programs," Rice said, estimating the cost to be "$5 to $9 billion over five years."
Richard Vetter, president of the conservative Center for College Affordability and Productivity, believes federal financial aid itself is partly to blame for what he called the "student debt crisis."
In a recent speech at the conservative Heritage Foundation, Vetter said "soaring financial aid, in part federally financed, has contributed somewhat to the escalation in college tuition costs."
"I have a skeptical view of Democratic proposals to go on a spending spree for student financial aid," Vetter said. "There is little or no evidence that this will do much of anything to improve college graduation rates and will simply perpetuate a complex system that exists on dubious intellectual foundations."
While some worry about the unintended effects of increased financial aid, it may be an area where the Democrats and President Bush find some common ground.
In its report released in September, the Commission on the Future of Higher Education found that "too many students are either discouraged from attending college by rising costs, or take on worrisome debt burdens in order to do so."
Bush's Education Secretary Margaret Spellings announced after the report's release that she hoped to "work with Congress to provide new funds for need-based aid through the federal financial aid system."
Thomas Mann, a Brookings Institution senior fellow who moderated Wednesday's discussion, questioned how much Pelosi's 100-hour plan would help Democrats in the long run.
Mann said the seven points of the plan, which include lowering health care costs, raising the minimum wage and implementing recommendations of the 9/11 Commission, have been "carefully crafted to reflect strongly held Democratic values and positions" and enjoy "virtually consensual support within the Democratic Party."
But, Mann said, they are also "the least important items" on the overall agenda for the legislative session. He said Pelosi has "not put at the top of that list many of the substantive items," specifically the war in Iraq, that helped Democrats win control of Congress in the November elections.
Mann said rather than rush through less important matters, Democrats should make sure to work with Republicans to ensure more cooperation on hot-button issues like Iraq and immigration.
Just make the tuition deductible. It's an investment. In other types of investments, you ultimately get to either amortize or deduct your investment when you sell the asset. Why shouldn't you be able to deduct tuition? Even living expenses while you are in college...
Answer: Because the federal government keeps finding ways to make it cheaper for those people who can't afford it.
Most students don't have an income in college, thus no deductions.
What if they made tuition a deferred deduction?
Designed it to be used within 5 or 10 years of graduation or you loose it?
What concerns me is that nasty correlation between ability and fundability. Not a pc topic.
The net result is that a good deal of money is funneled to college adminitrators under the auspices of "helping the poor" when in fact the resulting benefit to the poor is less than it appears.
And the expected tuition payments from the Middle Class (who are perceived as being able to pay for themselves and who are in fact more apt to graduate) keeps going up.
Yeah... I agree that's the problem with the Dem proposal. But if they could just make tuition and books deductible, end of story, that would be a good thing.
When you think about it, the Dem proposal is really a fraud, though. If you key it to ability to pay, then it really adds nothing to the current situation since students who don't have the ability to pay don't typically have to pay much for their college education anyway. An exception to that might be foreign students who don't qualify for US government aid. So maybe it's really those students that Pelosi is trying to benefit.
The cost of college will double over the next 5 to 7 years with the lowering of interest and fresh infusion of funds.
How about wage and price controls for colllege tuituion and for the salaries of college presidents, and football coaches?
I'm not sure I agree with that. Opening or expanding the size of a college is a pretty easy thing to do. Increasing the funding might increase the enrollment, but it should not drive up the cost of tuition.
Health care is a different issue, though. You can't just open a hospital, or increase its size. You can't just decide that since medicine is a lucrative profession, you're going to open a doctor's office. If demand increases in the health care industry, there is no assurance that supply will adjust to that increased demand. In fact, because of the heavy regulation of that industry, you can bet that it won't.
I think the real reason that college is so expensive is that they are using money that they extract from the rich and middle class to fund reduced or free tuition to the poor. College is not expensive for the poor--only for the rich and middle class.
There are some colleges that don't play that game, and their tuition is not all that outrageous. Unfortunately, they are few and far between, largely because of the fact that most colleges are affiliated with government, and government's mission statement is to benefit the poor at the expense of the rest of us. Also, those colleges don't tend to be the best colleges in the land. If you want quality, you've gotta pay for it.
None of these experts notes the other insidious result of this kind of "support": colleges keep inflating tuition because of the easy dollars that make it "affordable". College tuition, room and board has been inflating at around 7% compounded for the past 3 decades thanks to student loans and other programs designed as "support for middle class families". If colleges and universities were following the model of the free market, costs would be squeezed all the time and prices would have been constrained so that it would be much more affordable.
"...make it easier for low- and moderate-income students to afford college tuition ..."
How about this for a solution: Get a job. Save money.
Can I run for congress now?
Even bringing up the word "deduction" assumes you except the current tax system.
I realize yous guys are commenting on the reality of what is today, but that has to change or the middle class is going to become poor! As conservative Repubs we have a tremendous opportunity to STOP this current tax system, we have to band together as a huge vocal group, protest and make this and the forefront of '08. Don't let this time go by. I don't know what the current repub leadership is doing right now, but they better get a clue real fast!
What about just tax every one a flat rate and get it done with NO deductions for anything? That's fair. Or does that just not make any sense at all? We have to do something about the current legal thievery being attempted by the DBM/dems (and some repubs) to fund their outrageous stupid, insane social programs.
We saw that raising Cain worked for the DBM/dems - so let's get it going!!!
We used to call it featherbedding. When I taught at a black heritage college 80% entered unable to do college evel work. They spent the first two years of college learning what they should have learned in grade one and two. Many college students today are the jr high students of the past. Keep the pressure on standards and accountability on K-12 and reduce the number of college students. If you don't, the ed establishment will just demand more and more money for doing less and less.
BINGO!!!!!!!!! on the money!
When are folks, particularly liberals, going to grasp that not every person is meant to go to college. Not every student is capable, not every person NEEDS to go to college.
Yet the liberal mantra is that ALL students should get to go to college.
OF course, then colleges get reamed for their graduation rates...go figure.
This whole 100 hr.thing violates the constitution.The American people are entitled to representation by their elected official.By denying republicans ANY input is telling the citizens they are NOT going to allow their views to even be heard.I think the republicans should make an issue of this by NOT showing up for work and then stating there was no point in doing so.
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