One of us is a U.S. Senator who will soon face a crucial decision on keeping college affordable for students in Minnesota and across the country. The other two are college students who are accumulating college loans to pay for their education, and who know there’s a lot riding on upcoming decisions in Congress.
Although we come from different generations, the three of us share the same belief that investing in a college education is also an investment in our nation’s economic future.
With the recent news that college loan debt now exceeds $1 trillion and has surpassed even what Americans owe on their credit cards, we know that we are sending many of our newly-minted graduates out into the work force awash in crippling debt. But just as disturbing is the fact that the fast-rising cost of college is making college difficult — if not impossible — to afford for millions of students. This undoubtedly has deep implications for future job growth and for our nation’s ability to compete.
In Minnesota, where we pride ourselves on our education system and on providing students with top-notch post-high-school options, our student debt is staggering. We have the nation’s fourth highest debt load, with the average graduate leaving college with almost $30,000 in college bills.
Is it worth it? Well, students are gambling that it is. And for good reason. In the very near future about 70 percent of all Minnesota jobs will require some kind of post-secondary degree or other credential. And the jobs that don’t require additional education will pay less — a lot less.
Students aren’t accumulating such large debt loads because they’re lazy — far from it. Last year, when Sen. Franken met with a group of MnSCU students, every hand went up when he asked how many of them work at least 10 hours per week to help afford college. Some even put in a full 40-hour work week while attending school.
As more and more students take on debt to get through school, Congress must decide by July 1 whether it will allow the interest rate on subsidized Stafford loans to double. This year, it is estimated that more than 7 million students will take out these loans, including some 200,000 Minnesota students.
Without congressional action, interest rates on future subsidized Stafford Loans will go from 3.4 percent to 6.8 percent, and the average subsidized Stafford loan borrower will face $1,000 in increased loan costs for each year they attend school. And we know that every dollar spent paying down debt is money that can’t be saved or that is unavailable to buy a home, a car or other purchases that ripple through our economy. And many graduates report delaying major life decisions in order to make monthly student loans payments.
We all know that our nation’s economic future is tied to making college more affordable, and we know some of the steps we need to take to get there. First, we need to freeze future subsidized Stafford loan interest rates at current levels and prevent them from doubling in July. There continues to be debate on how best to pay for this, but our presidential candidates as well as our congressional leaders have all said they want to get it done.
Page 2 of 2 - Second, we need a universal financial aid form that would allow students to easily compare financial aid packages from different schools. Currently, students must decipher a complicated system of grants, loans, and work study funds, and often don’t understand what they’re eligible for. A universal form would give families the ability to compare financial aid packages and to know exactly what college will cost.
Third, we need to take steps to actually reduce the cost of college so that students don’t have to take on such massive debt loads. There are no easy answers, but it is the responsibility of universities, state legislators, Congress and other federal officials, as well as community stakeholders to come together and develop solutions to address this pressing problem.
At a recent University of Minnesota event on college affordability, one student remarked: “The question is always: ‘How are we going to make it?’” Getting your degree shouldn’t make you go bankrupt. And we all hope that in the months to come, we see some serious action to fix what has become a major problem for American families and for our nation’s future.