Friday, May 18, 2007
Yara Zakharia, Esq.
With a presidential election that is looming on the horizon, the top 2008 Democratic candidates are setting their sights on educational reform and financing. As part of an across-the-board commitment to make college more affordable, they are communicating a common vision vis-à-vis the funding of a college education.
Democratic presidential contender Barack Obama's (IL) proposal involves ending federal government subsidies for banks that furnish student loans. The savings would instead be redirected to provide student loans directly to students who can apply for financial assistance through either the Education Department or the private sector.
Presently, college students can acquire loans straight from the Department of Education or from lending institutions with loan programs that are federally subsidized. Student loan recipients are charged similar interest fees and rates under both programs.
Senator Obama is calling for the elimination of the bank subsidy program, which according to financial experts, is funded with $6 billion of taxpayer money. The savings would be utilized to issue loans to a greater number of students. Obama emphasized that the "system needs to be fixed". He explained as follows: "We shouldn't be providing billions in taxpayer-funded giveaways to private banks. We should be providing an affordable, accessible college education to every American."
Obama' proposal mirrors the "College for All" plan of Senator John Edwards, who is equally advocating a fundamental revamping of student loan programs. Edwards' plan would also wipe out the bank subsidy program and enable all students to receive loans strictly and directly from the Department of Education. Edwards has, for many years, backed the Direct Student Loan program, whereby the federal government issues loans that cover approximately 25% of the national student population.
In light of the exorbitant higher education costs depleting the average American families' piggy bank, the public is all ears to proposals aimed at alleviating the price crunch. Democratic presidential front-runner Hillary Rodham Clinton (N.Y.) has a "student borrower bill of rights" agenda in mind. She suggests basing loan payments on income and maintaining interest rates and fees at a reasonable level.
By pointing to statistics showing that less than half of students in the U.S. complete their degrees, Senator Clinton emphasized the need for greater governmental intervention and involvement. "We need to begin by making college more affordable and accessible," she stated.
Senator Joseph R. Biden (DE), another candidate who will present himself for the Democratic presidential nomination, is pushing for a tax deduction on tuition payments. He introduced the College Access Act of 2007, a piece of legislation subsidizing the cost of an average tuition at a public two-year college and, at minimum, 50% of the tuition cost at a public four-year university for middle and lower-income households. He reasoned as follows: "College is on the verge of becoming a luxury good. Rising costs are putting college out of reach for more and more Americans." Furthermore, Biden intends to reach out to low-income households by increasing Pell grants that would cover average tuition at public schools, universities and colleges.
Still another prominent candidate for the 2008 presidency, Senator Chris Dodd (CT), said that he would increase federal student aid and make it possible for students to consolidate their student loans at low interest rates.
The Democratic presidential candidates' proposals targeting a student loan industry that is valued at $85 billion are striking the bull's eye- namely, capturing the interest and attention of prospective students and their families.
