Jimmy Fallon and Obama Jam Session Tackles Student Debt Crisis [+Video]
Last night, Barack Obama went on Jimmy Fallon to push Congress to keep rates low for student loans. Obama, showing off his smooth personality, “slow jammed the news” with Fallon and his band, which includes several Roots performers.
See the whole clip here.
As Mark Kogan outlines, the student debt problem is huge. “Outstanding student loan debt will exceed $1 trillion this year and it shows no sign of shrinking. Public universities, in response to continued budget cuts caused by the recession, have hiked tuition 8.3%, doubling the rate of inflation. Private colleges, generally not as cash-strapped as state-subsidized schools, have also continued to raise tuition rates. The average cost of attending college broke the $30,000 barrier in 2006 and has continued to grow, with private tuition averaging $35,000 per year.”
As Tracey Bark explains, “On July 1, 2012, federally subsidized student loans could see their interest rates double. The extra $2,800 dollars this would add to the average borrower’s debt is part of a much larger crisis in student debt. This year, outstanding student debt is expected to reach over $1 trillion dollars for the first time ever, after students took out a record-high more than $100 billion in loans last year.”
The short-term fix is to subsidize loans and keep the rate low. What is the long-term solution? Here are 5 ideas presented by PolicyMic pundits.
1. College isn’t for everyone. Mark Kogan says, "What we need is a national discussion on higher education. College isn’t for everyone and we need to stop selling kids on six-digit loans before telling them how unnecessary their chosen major is." Melissa Freeman argues vocational schools could be the answer. “The U.S. currently has in place a fairly extensive network of trade and vocational schools, offering associate degrees, diplomas, and certificates in fields that include art and design, healthcare, paralegal studies, information security, cosmetology, as well as many others … The bottom line is, not everyone was meant to go to college, and we need to stop seeing that as a negative thing.”
2. Lower the cost. As Jonathan Tjarks argues, "Lowering the costs of higher education would make it easier for lower- and middle-income Americans to compete in the modern workforce. Colleges love to point the finger at Wall Street and Washington, D.C. for our increasingly unequal society; it is time they looked in the mirror."
3. Colleges need to be modernized. Andrew Hanson believes, “...we should invest in a dynamic system of post-secondary schools that reflect the high-demand skills in the marketplace, changing curriculum in response to innovation. Liberal arts education will always have a place in our society and it will remain a viable option for many of our best and brightest students. But, one size does not fit all, and for many, the current system is not fulfilling its purpose.”
4. Colleges are on the right track. As John Doble explains, “technological, social, and academic trends give reason to hope that American education will continue to improve student’s lives and the competitiveness of the economy as a whole … Access to education is growing as the costs are falling, education preferences are diversifying, and the focus of contemporary reform efforts are about where they should be. It is very likely that the future of American education is much brighter than the present.”
Lastly, here’s an under-reported by twist on the situation.
Bankruptcy won’t absolve you of student debt. As Paul Zuradzki explains, “In the same manner that criminal debt is treated (unpaid taxes, child support, alimony), student loans are one of the only classes of finance that cannot be discharged through bankruptcy.” Paul highlights Sen. Dick Durbin bill that rewrites bankruptcy code.
Open Mic: Beyond keeping rates low for students now, what are the pro’s and con’s of the proposed solutions to the higher education crisis?