July 22, 2014

College loan debt is at an all-time high. To address this problem, President Obama recently used executive action to extend income-based loan repayment options to millions more students. The program caps monthly payments and completely forgives student loans after as little as 10 years.

Sounds great, right? Not so fast. Loans have to be repaid by someone. And that someone is you.

Heritage Foundation education expert Lindsey Burke explains:

Capping loan repayments, forgiving balances — none of these options are free. Taxpayers, many of whom don’t hold bachelor’s degrees themselves, must pick up the tab for this federal largesse. Moreover, generous income-based repayment options and loan forgiveness — and federal student loans and grants generally — do nothing to mitigate ever-increasing college costs.

Increases in student aid are the wrong way to lower college costs, Burke adds:

In fact, college costs over the past few decades have risen in tandem with increases in aid, suggesting such aid might actually exacerbate the problem. Why should a university work to keep tuition and fees in check when there is a virtually open spigot of federal aid, readily available to students, with little concern about the student’s credit-worthiness or ability to pay back the loan later? 

A better option for driving down college costs and making education more affordable is the new HERO Act, which would reform the broken accreditation process and enable new educational options.

“South Carolina, for instance, could allow Boeing to credential aeronautical engineering courses,” Burke says, “and Texas could enable Texas Instruments to credential mathematics courses.” This would give students access to training they need while reducing the size of the loans they need to take out.

Do you think taxpayers should pay even more of students’ higher-education costs?

Comments (3)

David - July 25, 2014

I do not understand what the problem is with Congress.
Why can’t they grow a pair and make demands on the so-called President? He (Obama) has run-a muck and has made a laughing stock (in my opinion) of the Republican Party who are perhaps as much the problem as Obama is. How can Congress allow Him ( I will use this term because I don’t consider Him as the President of the United States of America-Him is the president of Obama) to continue issuing Executive Orders without calling foul or executing action against His tyranny? I am against paying someone else’s student loan debts. I paid mine in full and most of kids had none or very little student loan debt when graduating from college. The system needs to be changed to pay as you go or don’t go at all, or get assistance from family. Man I would like a Business loan for my business that I would not have to pay back. Say maybe $1,000,000.00 that would be forgiven in say again maybe 5-10 years. That sounds fair, since I have been in business since 1987 and have paid in more than my fair share. I believe it is time that I get a freebie from the OBAMA ADMINISTRATION OF FORGIVENESS. I believe you get my drift. Those of us who have paid our fair share and then some are getting pretty darn tired of having the blood sucked out of us. We have a great country but it is time to the DICTATOR OUT OF THE SYSTEM and a CONGRESS THAT CAN QUIT LOOKING OUT FOR RE-ELECTION AND JUST SUCK IT UP AND DO THE RIGHT THING FOR THE COUNTRY-NOT THEMSELVES. I am tired of HIM and Congress for taking this country into the depths of despair. Yes we still live in the greatest country of all time but this has to stop and the sooner the better for us all. GOD, please help us, this country needs it.

Michael Fowler - July 26, 2014

To begin, I was the first and only child of five in my family to get a college degree. Almost as soon as I had children I opened a savings account for both kids and consistently saved and invested their education – and on very modest salaries of both myself and wife. By the time my kids were of college age I had enough saved to put both of them through college – I received NO government aid or assistance. What I did not do was belong to a country club, drive a BMW or Mercedes, nor live in the biggest house on the block. We rarely went out to eat at fancy restaurants and did not buy fancy clothes. Although I later became President of the company I worked for my wife and I still cleaned businesses at night and on weekends to pay for extras. We just finally quit our cleaning jobs and are now fully retired with a nice nest egg that will hopefully carry us through a long and comfortable retirement. Too many people don’t want to sacrifice nor put in the effort necessary to be successful.
I also think that many colleges are rich in endowment funds and/or have too many professors working limited hours teaching (created by tenure) as costs continue to rise – colleges have also paid adjunct professors and special speakers (such as Hillary Clinton) horrific fees to speak or teach one or two classes a year while still receiving funds from state and federal governments. Take some of the endowment funds and pay off debt and make professors work a minimum number of hours a week – if they are truly there for the benefit they should not mind.

Nathan - July 27, 2014

I love Heritage’s work, and generally agree with them whole-heartedly. This issue, however, I disagree with. Through interference with the market, the government made it a necessity to have a degree to get a job in the malaise that is our economy. They have also continued to drive costs through the roof because of “aide,” and artificially adjusting the price. This has resulted in a huge tax, called student loans, to the people that attended college. You may argue that it is a product that people chose to purchase, and I would agree. The level of agreement is directly on par with the statement that health insurance is a product that people choose to purchase; ala Obama-Care. That reasoning, however, isn’t my main reason for disagreement with this concept. The main disagreement is that the bill will need to be picked up by the taxpayer. In my household alone, $800 a month are spent on student loans. What would be the result of freeing $800 a month on one’s budget? Short and simple… $800 more that can be pumped into the economy through local businesses; NOT the federal government. I don’t know about you, but I personally think it would do much better in the hands of private enterprise that going back into the coffers of the government. As far as the hole it would leave in the federal budget; I’m pretty sure a major economic boost like that will more than generate enough tax revenue to cover it.

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