Why Just Student Loan Interest Rates are Only the Smallest Issue for Our Country’s Education – Part 1
Nowadays, one of the most debated issues in Congress (and among presidential candidates whenever election period is around the corner) is if the Government should raise the interest rates on student loans and personal loans to almost seven percent. However, despite its seemingly important nature, this issue is little more than a simple sideshow, since the costs of tuition will continue to be unbearably high and out of reach for many, regardless if the interest rate for student and personal loans rises or not. Of course, if tuition remains so inaccessible or only accessible through personal loans, then the young of the country will either fail to be up to the standards of students from other countries or will gain that education but at the cost of being in debt due to personal loans for years after they graduate.
In the past few decades, the U.S. has invested significant amounts in Education, since this is definitely the path to progress for the youngster of the country. Thanks to those initiatives, the U.S. has grant colleges, free and compulsory grad schools and more. In fact, it is because of initiatives like these that the country is free and educated, as well as prosper.
It is because all of these facts and issues that college is slowly becoming far more out of reach for more young Americans than even before regardless of how big or small interest rates are. A far more serious issue is that several states across the country have already reduced their support for colleges and universities, making it almost mandatory for potential students and their families to acquire personal loans in order to fund their studies. There are many factors that have contributed to this, including the recession, unfunded retirement costs and such. Even worse, as a result of this, colleges and universities have trimmed enrollment and even discarded many courses, so if you got a personal loan to fund your studies, you will be literally getting less value for your money.
Here’s an example: The state of California has cut a lot of its support for the California State University system. In order to cover for that gap, the university has come up with no better idea than to simply hiked tuition costs by up to 15 percent every year, which represents an impressive four-fold increase since the year 2001. Add to that that while tuition increased steadily over the past decade, incomes have mostly remained flat for most citizens.
On top of that, since not many students can afford to get and repay a personal loan or a student loan, several state colleges and universities have started to restrict access to in-state students and instead they are filling their classes with ones from other states and even from other countries. In our example, the University of California has increased its recruitment of foreign students who can pay more than $36,000 per year to almost double, all while at the same time denying admission tens of thousands of fully-qualified California residents who couldn’t manage to pay more than $13,000 per year.
While you might agree with these new policies due to the financial advantages that universities get from them, the huge, long term problem is that because of those policies, affordable higher education might be all but dead in America in the next decade.
And that is it for today. As you can see, this is a big problem for schools and U.S. citizens, especially if they can’t afford a personal loan. Check back tomorrow to learn more about this important issue.