September 06, 2015

Worcester Telegram & Gazette Op-ed: Making higher education affordable for all

Students all across Massachusetts are off to college. It's an exciting time, but for many families it also means confronting the exploding cost of higher education. Even adjusted for inflation, a family trying to send a son or daughter to a state school today will face tuition prices that are more than 300 percent of what mom or dad paid a generation ago. High prices are forcing more students and their parents to take on mountains of debt just to get a degree.

As each family struggles to shoulder a bigger debt load, the cumulative impact is felt throughout our economy. The Federal Reserve, the Consumer Financial Protection Bureau and the Treasury Department have all warned that high levels of student loan debt are holding back many young people from buying homes, starting businesses, and making the kinds of purchases that push the economy forward.

In other words, every one of us - whether we have kids or not - has an interest in making college more affordable. Right now we're caught in a vicious Catch-22: Our economy cannot flourish without college-educated workers, but our economy will stagnate if students take on ever bigger debt loads to pay for college. Degrees push us forward, but debt holds us back.

It's time to dramatically reform higher education, to move the whole system toward greater affordability for everyone. That means more resources and more accountability, and everyone needs to work on the problem: colleges, states and the federal government.

Let's start with colleges. Both public and private, nonprofit and for-profit colleges take billions of federal dollars every year. While many schools work hard to provide a first-rate education, the schools that fail to serve students, that waste federal financial aid dollars or that spend wildly to attract more students face almost no consequences.

We can change that. The government should force colleges to put some skin in the game on student loans. Right now, colleges reap all the benefits of student loan funds, while students and taxpayers bear all the cost when borrowers default. Conservatives at the American Enterprise Institute have endorsed risk-sharing proposals, and Senate Republicans are open to including a risk-sharing program in the Higher Education Act rewrite in this Congress. Schools also should be required to spend a minimum proportion of their federal financial aid dollars on expenses directly related to education - not for exploding numbers of administrators or elaborate marketing departments. And innovations like a "shared savings" program could give schools an incentive to cut costs - rewarding colleges that help more students graduate in four years instead of five or six, for example, would save money for the students and the federal government.

States need to do their part too. States once put a high-quality, affordable education within reach for any young person willing to work hard. But between 2008 and 2013, states cut higher education spending by about 28 percent per student. And as states reduced their support for higher education, tuition went up and families had to pick up the bill. When they can't, those costs are often shifted to the federal government and taxpayers through grants and loans. If states won't maintain minimum levels of investment in their own schools, they shouldn't have access to federal aid.

States also can help address existing debt by refinancing student loans. I've worked in the Senate to create a federal option that would let borrowers refinance at lower rates, but Republicans in Congress have repeatedly blocked our efforts. States don't have to wait for Congress - they can do this on their own, and it wouldn't cost taxpayers a dime. North Dakota recently implemented a refinancing program passed under the leadership of a Republican governor with bipartisan support.

Like colleges and states, the federal government should step up, too. If low-income kids are going to get a real chance at college, Pell Grants are a lifeline, but funding that used to cover three-quarters of the cost of going to a public college in the 1970s has shrunk to only one-third the cost today. Pell should also be available year-round for students who are pushing had to make it through school.

The federal government can improve and simplify the process for applying for financial aid. In Massachusetts, nearly 30 percent of college-bound students don't even fill out the FAFSA form. Student loan program rules also need strengthening - better consumer protections, better loan forgiveness for public service and better relief when schools defraud or cheat their students. Most importantly, the federal government should not profit from student loans - period.

We cannot build a 21st-century workforce and a 21st-century economy if colleges keep raising prices, if states keep cutting support and if the federal government squanders billions of student loan dollars on schools that do not serve their students. If we drown our young people in debt, then we will drown this country's future.

I grew up in a family that couldn't afford college, but I was blessed to end up near a state school that charged $50 a semester. Without that, I wouldn't have had anything like the opportunities that have been open to me. I believe in an America that invests in its young people. It's time once again to make college affordable for every hard-working kid who wants to get an education.

Read the article on the Worcester Telegram and Gazette here.


By:  Senator Elizabeth Warren
Source: Worcester Telegram & Gazette