Fixing the Student Loan Problem: Of Tuition Increases and Administrators’ Salaries

An author on Gather.com has posted one of the best articles I’ve seen outlining the student loan problem and possible solutions.  On the college education Catch-22:

That’s the dilemma that faces most kids who are graduating from high school these days. Like the parents that work to avoid [pay for]* daycare, or the kid who works to pay off the car he uses to get to his job, high school graduates are confronted with the need to go to college in order to get a job to pay for the college they attended.

*Correction mine.

Jobs You Can’t Afford – Social Worker

Social workers play extremely important roles in many sectors of society from working with abused children to counselling drug and alcohol abusers.  The pay isn’t great – over 20% of social workers make less than $30,000 a year – but social workers aren’t in it for the money; they’re in it to help people and to change lives. 

Unfortunately, the cost of the education necessary to become a social worker is rising even as salaries stagnate, making it increasingly difficult for caring people to choose this line of work.  In order to become a licensed social worker, most people must earn both an undergraduate degree and a two-to-three year graduate degree (MSW), which means significant debt.  Consider these statistics from the National Association of Social Workers:

• Bachelor’s level social workers have an average loan debt of $18,609.
• Master’s level social workers have an average loan debt of $26,777.
• Doctoral level social workers have an average loan debt of $32,841.

UK to Prevent Universities from Raising Fees

In an effort to see what the United States’s higher education system can learn from other countries, I plan to start covering more international higher education news.  On that note, an article in today’s London Times reports that in order to ensure that students don’t have to take out more student loans during the economic crisis, the government is freezing tuition fees on undergraduate education for the next five years, in the face of opposition from universities:

Eric Thomas, Vice-Chancellor of Bristol University, said that it would be unrealistic for universities to expect an increase in fee or other income in the current economic climate. “We must expect our income to flatten. In the past 12 years, income has risen by 10 per cent a year annually. Now we will have a situation where it will flatten, but we will still have the same cost base,” he said.

Note, however, that most UK universities are publicly-funded.  This is in sharp contrast to the U.S. system, and I can’t imagine that changing any time soon.  Nor, in light of the fact that I still believe that many of our higher education institutions are the best in the world, am I convinced that it should.  Still, it’s something to think about considering our own government seems to prioritize making sure more loans are available than reducing the cost of education so we don’t need the loans in the first place.

Bailout for the Student Loan Industry (But Not Borrowers)

The Department of Education is going to buy up more student loans from private lenders in an effort to bolster the private student loan market, the New York Times reports.  The move comes as investors shy away from the student loan market in the wake of the economic crisis, and large lenders like Sallie Mae stand to benefit the most:

Sallie Mae and big banks like Citigroup and JPMorgan Chase, which make thousands of government-subsidized student loans each year, stand to benefit the most from the government’s program. But so will dozens of nonprofit student lenders that are caught in the same bind. The government’s action will not resolve all worries about student lending. Student loan borrowers this year are finding it more difficult to obtain private loans, which are not guaranteed by the government and which typically carry higher interest rates and less favorable repayment terms.

Thus, in yet another industry, the government is bailing out the people at the top of the hierarchy and overlooking those at the bottom.  Part of me understands this – the fact of the matter is, the way our current system is set up, most students need to borrow, and if the lenders can’t lend, that leaves a lot of people unable to get a college education at all.  On the other hand, I feel that their must be some alternative to letting tuition costs creep ever higher and forcing everyone to rely so much on loans that such bailouts become necessary in times of economic distress.

College Crisis – Are Tuition Free Programs On Their Way Out?

Not even 24 hours ago, I posted on students seeking tuition free colleges in the face of economic turmoil.  Now, the New York Times is reporting that the economic crisis is hitting colleges particularly hard and the effects are being felt in layoffs, hiring freezes, postponed construction projects, and tuition increases.  The article specifically notes that Tufts University, which currently has a need-blind admissions policy, is reconsidering that position:

“If I had to do it all over again…” – John’s Student Loan Story

John* was supposed to be a success story.  He grew up in a middle class home in Elk Grove, CA where his father was a captain of a dredging ship and his mother worked as a chemist for the state.  John was a precocious child, earning straight As throughout much of his early education.  When he decided to major in history at the University of California-Berkeley, his parents were happy to help to the extent they could.  He graduated in 2003 with about $5500 in student loan debt, substantial, but much lower than the national average.  He felt lucky.

Obama’s Secretary of Education – More Speculation

An article on Yahoo! news is reporting on Obama’s possible cabinet picks, including that for Secretary of Education.  I have already mentioned a few of these names, but there were a few new ones as well, including Colin Powell and Inez Tenebaum, former South Carolina schools superintendant.  Powell has actually been mentioned before for this position, but he says he hasn’t been approached, and it seemed so unlikely to me that I didn’t blog on it.  But his name keeps popping up so I decided I’d better at least mention the possibility.  Stay tuned.

Federal Deficit May Curb Student Loan Reform

Even as Obama gave his first press conference as President-Elect today calling on Congress to pass an economic stimulus package in the next few months, the National Association of Student Financial Aid Administrators reports that the huge budget deficit might prevent him from doing too much about the sky-rocketing costs of higher education.

Tuition-Free Colleges – What’s Available?

An article from Associated Content today notes that due to the flailing economy, more students are looking into the possibility of going to tuition free colleges.  Some colleges are tuition free for everybody, but most offer programs where tuition is free only for those students whose parents make under a certain amount of money. 

However, it’s important to keep in mind that even when such aid is offered, there may be hidden costs such as computers, books, room and board, etc. that aren’t factored into the aid equation.  I spoke with one financial aid official at a large public university that put it this way, “You have to be careful about proclamations that schools make about free education.”

That caveat aside, here is a partial list of what may be available:

Jobs You Can’t Afford – Chef

One of my chief reasons for starting this blog was to highlight how much our career choices are affected by student loan debt.  As The Nation once suggested, student loans have everything to do with social control, but it doesn’t always work out for the betterment of society:

How many young people turn away from low-paying but vital professions because they can’t earn enough to pay back their loans? How many potential social workers, pro bono lawyers, journalists, environmentalists, teachers, artists, secondary medical professionals and community workers are we losing?

Thus, I have decided to begin a new series – Jobs You Can’t Afford.  Here I will tell the stories, culled both from my own interviews and other sources, of the many career options that are closed to people with large amounts of student loans.  I will tell both the stories of people who have had to give up dreams and the stories of people who wouldn’t – and suffered as a result.