Helping students be aware of the impact of student loan borrowing to finance college is a bit of a pet project of mine and I have written about it here and here. Don’t get me wrong, I think a moderate investment in student loan to obtain higher education is a very wise investment. Moderate being the key word in that statement.
Inside Higher Ed profiled a proposal made during recent Congressional discussion on the federal deficit that would require students to pay the interest on student loans while they’re enrolled in college, a change that would save the government $40 billion over 10 years.
Students who borrow the maximum amount of subsidized loans, $23,000, and take six years to graduate would owe $5,000 more by graduation and $9,000 after a 20-year repayment period. ~Pauline Abernathy, Institute for College Access and Success.
National Association of Student Financial Aid Administrators president Justin Draeger said he strongly objected to the idea of shifting funds from student aid toward deficit reduction but finds it a better alternative than cutting the Pell Grant which would have more impact on student access to college.
When debt attributed to private and federal student loans is set to surpass $1 trillion dollars in the United States and already contributes to the ballooning national debt, isn’t adding $5,000 more debt to the average student loan borrower government-speak for robbing Peter to pay Paul?
Shouldn’t we all strongly object to shifting funds from student aid toward deficit reduction?