Student Loan Debt Will Only Continue to Be An Issue in 2012
On July 6, President Obama signed legislation that will keep 7.4 million students form paying an estimated $20 billion in doubled interest rates on their Stafford loans. This decision has been a huge victory for students, as well as for many Americans who can now have assurance that America's gridlocked Congress is capable of taking effective action on major policy issues.
But we shouldn'tt quite celebrate yet. The student debt crisis that has become an epidemic in this country has not been completely solved.
Starting on July 1, students who aspire to earn a graduate degree (which has become mandatory for many white collar jobs) will be responsible for paying the interest on their federal Stafford Loans immediately following graduation from undergraduate college. In addition to the elimination of the six-month grace period for a Federal Stafford Loan, the federal government will no longer be subsidizing loans for graduate students.
The elimination of the grace period and subsidized loans for graduate students made way for the rapid expansion of the Pell Grant. This grant has existed since 1965 as a result of the Higher Education Act and promotes access to postsecondary education to low-income undergraduate and certain post baccalaureate students without needing to pay back the grant.
Recently, this grant has been subject to vast expansion. According to the Department of Education, funding doubled from 2009 to 2011. Between these same years, Pell Grant recipients have increased from about 6.2 million students to 9.3 million. The maximum grant climbed from $4,731-$5,550 while the average grant size rose proportionally. The rationale behind this expansion of the Pell Grant through the elimination of graduate funding is to create a means for ow income groups to enter into college. As the argument goes, it is more beneficial to use the money for this purpose than to provide a backside benefit for students who already had access to higher education.
This program is absolutely necessary to combat the lack of higher education opportunities for low income families. Nonetheless, the success of the program has become subject to growing scrutiny.
Currently, the only requirement for eligibility is income level, and to retain the grant students must maintain a 2.0 GPA. The program has absolutely no incentive to graduate built-in which has led to the speculative low graduation rates of Pell Grant recipients. I say speculative because there no formal study or statistic examines the success of the Pell Grant after it has been awarded.
If we are making such enormous expansions to the Pell Grant through the sacrifice of aid for student loans and student debt, we should first demand a study of the functionality and success of the program before any further expansions are made.
Second, we should not only make it a priority to increase enrollment but also increase college graduation rates amongst Pell Grant recipients. To do so, we should incorporate some form of incentive to graduateIt would be a good idea to refine eligibility requirements to limit Pell Grants recepients to students attending institutions committed to student success.
Finally, because many Pell Grant students are products of an education system lacking in adequate resources, many Pell Grant recipients are not prepared for the demands colleges uphold in respect to the preparation level of their students coming out of high school. Therefore we should provide an option for Pell Grant students to enroll in an opportunity program that provides counseling services and a pre-orientation program that strengthens students’ academic and study skills and familiarizes them with their particular college environment. As a result, students may have the preparation and tools they need to succeed in college and finish their degrees.
Skidmore College in New York offers a similar and successful program called HEOP/AOP which has received recommendation to be used as a model from the Institute for the Study of Social Change’s Consortium based on their high success rates in GPA and graduation rates.
Though the Pell Grant is a program that is worth investment, it is a program in need of reform and assessment.