CAP Senior Economist Christian Weller: Rising College Costs and Reduced Funding a “Perfect Storm”
The U.S. has placed college students between a rock and a financial hard place, Christian Weller, senior economist at the Center for American Progress (our parent prganization) told Bloomberg’s Tom Keene in an interview last month.
“We’re telling them to go back to college - get an education [because] we need it as a country to be competitive, it’s a pathway to the middle class,” he said. “But at the same time, we’re pulling away the resources for people to afford the more and more costly college. States are cutting back on their spending on colleges; we’re cutting back on Pell grants and Stafford loans. In the middle of this crisis, everything is coming together to form a perfect storm.”
Student debt has reached an all time high, ratcheting past the $1 trillion mark and surpassing all outstanding credit card debt and the conflicting messages and “broken the promise” handed out to America's youth, said Weller, will only prove to detrimental to our nation's economic well being in the long run-- and on a global scale.
“The country needs you [students] to be competitive in the global market place,” he continued. “But, at the same time, we don’t give them the resources to build those skills.”
Though a recent poll indicated that 92 percent of young Democrats and 78 percent of young Republicans believe that increased financial aid and loan affordability would strengthen the economy, higher education continues to be among the first institutions hoisted onto the budget cut slab--both on the local and federal levels.
“It’s a vicious cycle where you’re ratcheting their [student] costs. So the people are being squeezed and squeezed more from all sides, and in the end that just cannot go on,” Weller said. “This is a foreseeable crisis in the student loan market, and it requires a policy fix to make higher education more affordable.”
Though long term solutions have yet to be put in action to relieve students’ looming debt, Vice President Joe Biden discussed avenues to increase transparency in financial aid packages with Secretary of Education Arne Duncan and other government officials earlier this month.
Officials at the Consumer Financial Protection Bureau are also developing a standardized financial aid “shopping sheet,” a more-easily navigable breakdown of college costs, scholarships and grant monies to aid students in making more succinct aid and loan decisions.
Another way to keep college costs down for the nation's future workforce is to make sure that once they've financed their education, interest rates on government educational loans remain fair and affordable. Keeping the 3.4 percent interest rate frozen beyond the looming July 1 deadline is a simple way Congress can help debt burdened college students immediately, and demonstrate that they're serious about tackling bloating college costs that threaten our future competative edge in the global market. Campus Progress and a coalition of national partners have joined forces with students and activists to tell Congress the time to act is now. There are nine days left before the deadline until the rate doubles to 6.8 percent, tacking on average $1,000 more onto the life of a Stafford loan.
Melissa Brown is a journalism intern for Campus Progress.
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