Policymakers field education questions

As Congress considers President Barack Obama’s plan to expand federal aid for higher education, Secretary of Education Arne Duncan and Assistant to the President and Director of the Domestic Policy Council Melody Barnes sat down Tuesday afternoon for a live Web chat to talk about the proposed legislation and answer questions from viewers and college students.

The bill, called the Student Aid and Fiscal Responsibility Act, was passed by the House of Representatives in September. It proposes a shift from the current student loan system, in which the federal government subsidizes banks that provide students with loans, to direct lending by the federal government. Such a shift would save $87 billion in federal funds, the Obama administration says.

Looming large in the conversation were concerns about students graduating overburdened with debt, especially given the current unemployment rate. Questions also addressed the high and increasing cost of tuition, teacher loan forgiveness programs, and high textbook prices.

“We know that the government can do this extremely well,” Duncan said, referring to the proposal to eliminate subsidies to private lenders in favor of direct federal loans.

Many banks that currently receive these subsidies are opposed to the measure, claiming that it would eliminate jobs and diminish consumer choice, according to an article written in the New York Times last week.

The legislation also includes funding for community colleges, early childhood education programs, historically black colleges and universities, and for increasing the amount of Pell grant money students can receive each year. It also seeks to provide universities with increased access to Perkins loans and to simplify the Free Application for Federal Student Aid.

“This is simply the right thing to do. Going to college has never been so important or so expensive,” Duncan said.

In response to worries about maxed-out student loans, overwhelming debt, teacher loan forgiveness, and funding for graduate degrees, Barnes and Duncan repeatedly emphasized an income-based repayment program that would cap loan repayment and ensure loan forgiveness after 20 years of payment. For those who enter careers in public service, all loans would be forgiven after 10 years.

The two also mentioned a $10,000 tuition tax credit and a $3.5 billion access and completion fund for universities that succeed in “building a culture around completion,” Duncan said. “Colleges aren’t that dissimilar from high schools—some do a good job of graduating students and some don’t.”

In addition to the proposed expansion of access to Perkins loans, Duncan emphasized that high tuition costs would likely be reigned in by the choices that students are forced to make, especially in light of the current economic landscape.

“The American public is going to vote with their feet,” he said. “Those American universities that are doing a great job of containing costs will have more students and universities that don’t are going to struggle.”

ray.katz@columbiaspectator.com