Massachusetts Daily Collegian

A free and responsible press serving the UMass community since 1890

A free and responsible press serving the UMass community since 1890

Massachusetts Daily Collegian

A free and responsible press serving the UMass community since 1890

Massachusetts Daily Collegian

The debate on student debt

President Barack Obama and Republican presidential candidate Mitt Romney squared off in their first debate on Oct. 3, and one of the hot-button issues they argued over was that of education in the United States. During their opening remarks, both candidates mentioned education, with Obama saying, “I think we’ve got to invest in education and training,” and Romney stating a desire to give the American people “the skills they need to succeed and the best schools in the world.”

Though the initial rhetoric may sound similar, Obama and Romney outlined their differences in the education system throughout the night. Of particular importance to college students were the candidates’ comments on higher education, and the role the federal government would play in higher education under each prospective candidate’s administration.


The main difference lies in what the candidates would do with federal student aid, particularly Pell Grants, part of the student aid program that awards grants (which, unlike loans, do not need to be repaid) to students from the federal government based on financial need. Obama charged that under Romney’s running mate Paul Ryan’s budget plan, funding for education would be cut by 20 percent; Romney denied this was part of his agenda as President, saying, “I’m not going to cut education funding. I don’t have any plan to cut education funding and grants that go to people going to college.”

These comments by Romney are not just contradictory to Ryan’s budget plan, but to the claims made on Romney’s own campaign website, which rails against the “flood of federal dollars [that] is driving up tuition and burdening too many young Americans with substantial debt and too few opportunities.” In general during the campaign, Romney has stayed close to the Republican Party’s platform, which states that “the federal government should not be in the business of originating student loans.”

The idea is that the increase in federal funding in the form of loans is a major part of what drives up the cost of tuition in the first place. Ryan even wrote as much in an editorial for the Wisconsin State Journal, stating, “The goal of federal financial aid is to make college more affordable, but there is growing evidence that wholesale increases in aid have had the opposite effect. Instead of helping more students achieve their dreams, these increases are simply being absorbed by (and potentially enabling) large tuition increases.”

It is debatable as to whether or not this claim has any substance. When speaking to the Christian Science Monitor, Michael Petrilli of the Thomas B. Fordham Institute said that “This has been the Republican argument literally for decades. There’s a correlation, but it’s hard to prove causation.” On the other hand, Beth Akers of the Brookings Institution argued that federal aid “may also serve to put some downward pressure on prices. Since grants generate inflationary pressure, it is wise to limit their use to instances in which the grant is likely to cause a student to obtain more education than they would have otherwise.”

Obama argued for essentially the opposite approach, saying that over the past four years, “what we’ve been able to do is to provide millions more students assistance, [and] lower or keep low interest rates on student loans.” For Obama, it is not cuts, but increases in aid that will best help students as the student debt bubble continues to swell.

The question of which approach is better for students, of course, is the subject of debate. Akers summarizes Obama’s approach by saying it “could be a good way to provide relief to students and their families in the short run, but may be an unsustainable model because of the upward pressure that it puts on tuition prices.”

However, what Akers does not acknowledge is that in this long-term view of looking at the student loan crisis — many students in the short-term will be lost in their efforts to pay for college. Pell Grants and other federal aid cannot simply disappear without many students having to drop out of college as a result, as without their aid they will no longer be able to pay for college.

In the end, neither candidate had all the answers when it came to the student debt crisis during the presidential debate. As long as both candidates continue to do more to argue against the opponent’s position, and not develop a fixed, comprehensive position themselves, students will continue to be stuck searching for a means to combat student loans, unable to rely on the federal government as an ally.

Billy Rainsford is a Collegian columnist and can be reached at [email protected].

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  • B

    Bowie Bankruptcy LawyerDec 14, 2012 at 10:30 pm

    I believe higher education is very important. However, I would not point fingers at the government for student debt.

  • A

    AlanOct 10, 2012 at 9:46 am

    Pell is a non-issue. Interest rate is a non-issue. The problem is the sticker price, and the fact that the lending instrument paying the price is structurally predatory due to the removal of fundamental consumer protections like bankruptcy, statutes of limitations, refinancing rights, truth in lending laws, fair debt collection laws, and state usury laws.

    Every other type of loan, federally guaranteed, and not, has ALL of these protections. Student loans, however HAVE NONE.,

    This has created a reinforcement mechanism that forces prices higher, creates artificial profits from predatory activities designed to extract wealth from the students far over and above principal and interest.

    All of the lending elements (ie lenders, guarantors, collection companies, federal government) are actually MAKING, not losing money on defaults.

    This is perverted, massively harmful to the students, and perhaps most importantly, has caused a wide array of systemic failings in government administration and oversight, lending administration and marketing, and School behavior.

    All of these entities have completely failed to inform the citizens what the true default rate has been for years (over 20%), and all of these entities have completely failed to adequately warn (or even warn) students about the lack of bankruptcy protections.

    This is like selling someone a car that has no brakes, taking out an insurance policy on them as they drive off the lot, and keeping this information all to yourself.

    College students really must understand this. Currently almost none of them are aware. I have looked at this system intensively for seven years, now, and so I sincerely hope that a few students will take this and run with it. Demand that your college fight with you to return, at a minimum, standard bankruptcy protections to all student loans. This is the only way the system can be fixed. Similarly, no other fixes (ie repayment plans, employment rules, etc) will have any meaningful impact on the problem until this happens.

    See to get a more thorough briefing.