Important Reforms for Financial Aid
Today's college students have a difficult road. Tuition is at its highest point and there is an increasing amount of student debt that has many economists wondering if education is the next big debt problem to tank the economy. However, there are some reforms that could seriously help college students and offer more financial aid. Perhaps the biggest obstacle is overcoming the issues facing higher education and creating value for college degrees.
There is the possibility that students aren't doing enough research on the degree program or picking the right degrees for a career. However, there is also a lack of consolidated information on student financial aid, including how to get grants, scholarships and merit awards. These two issues compound the problem with students not having enough information to pick a good program or understand what financial aid is available to them.
A study by Academically Adrift showed that 36 percent of all graduating seniors didn't learn problem solving, critical thinking, and analytical reasoning, which is a big problem considering that most professions require one or more of each. This means that degree requirements have seriously changed, and the numbers show in unemployment. With the increase of college graduates, there hasn't been an increase in jobs, and those who have higher degrees snatch up better employment first. So, as colleges provide little learning experience and yet continue to raise tuition beyond inflation rates, the increases are paid by taxpayer money through subsidized financial aid. So what is happening to the financial aid system? Taxpayer money is actually going straight to colleges and not to student education.
The even more surprising numbers relate to student debt. In a Federal Reserve Bank report, student debt exceeded $870 billion, which is actually more than credit card debt and auto debt. College graduates and those who don't graduate are stuck in the same unemployment pool, because they still aren't qualified enough to get the right jobs, thus they aren't able to pay back any of their student loans. The Federal Reserve report also indicates that more than 1 in 4 borrowers are behind in their student loan payments.
Student loans are also not dischargeable in bankruptcy, which means that they continue to haunt a debtor even if broke. This is because lobbyists in Congress have made it difficult to change the rules regarding student loans for many years. That's why so many, including the Occupy movement, have called for financial aid reform. There have been some responses in the government to these issues, including a bill that would make colleges with high tuition prices more responsible for their education and support services and offering more financial aid options to students. There are other financial aid reforms that could be beneficial for students, according to Marty Nemko, a columnist for The Atlantic, Los Angeles Times, and San Francisco Chronicle:
- New rules that make colleges show a minimum level of value or they lose government funding
- Colleges must post a charge of likely aid in years one through six of attendance, broken down by a student or family's income and assets
- Generous forbearance and loan modification policies
- Student loans becoming dischargeable in bankruptcy
Hopefully as activists grow louder, some of these changes will be heard by Congress and more reforms will lead to better financial aid packages for future students. Unfortunately the question of what taxpayers should pay for is still up in the air. There are those who believe that taxpayer money should go to making college education more affordable, even free. With less taxpayer funds to pay for school, it means that schools will continue to be privatized and will continue to raise tuition rates to even higher amounts in future years.
Students showing remarkable talents can also get a grant for a private school, including one for younger students in middle school or high school.
Nowadays, more and more students are turning to online education, both for convenience and the ability to get through your coursework quickly.