Education Secretary Arne Duncan is getting concerned about America’s estimated $1.1 trillion student loan burden. Speaking Tuesday during testimony before the House education committee, he said, “the fact that that debt surpasses a trillion dollars, there’s no upside there.”
This appears to be the first time President Barack Obama’s education secretary has publically indicated concern about America’s education debt.
According to an Ed Week piece, “he’s interested in a ‘long-term fix’ on student loans and wants to work with Congress in the next month and a half to make that happen.”
Well that better be one hell of a month and a half.
Student loan debt has been on a steady increase since the 1980s. This is despite fluctuating federal government policies with regard to student loans. Education debt holders have sometimes been allowed to discharge student loans in bankruptcy, and sometimes they aren’t. They’ve been subject to wildly different interest rates. They’re now allowed to consolidate their loans. The federal government has changed its policy on “gainful employment,” which determines which colleges can use federal student loans.
None of this stuff has made any meaningful dent in student debt.
According to an article at the Huffington Post, Senators Sherrod Brown (D-Ohio) and Jack Reed (D-R.I.) “have introduced proposals designed to ease debt burdens, whether by stimulating refinancings of high-rate loans or increasing the amount of loan modifications for distressed borrowers.” This policy, if implemented, would certainly be a great help to many college graduates (and dropouts) now facing troublesome monthly payments on their loans, but it would do little to address the real structural problem here,
I look forward to Duncan’s ‘long-term fix’ on student loans. A real long term solution, however, wouldn’t have much to do with fiddling around with interest rates.
We do not have high student loans burdens because of unfavorable student loan terms; we have a high student loan burden in America because college now simply costs more than many students can afford.
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