Well, yes, of course we do. But how do we do that? Thankfully, Proto has some answers to this question, because when I think of what college cost me (a lot), and what it will cost my kids (a lot more), I am on the verge of vertigo:
There are many long term options to improve affordability that we should pursue, including: controlling delivery costs through innovation, reducing student lost wages by accelerating graduate entry into the workforce, and creating seamless cost effective lifelong learning by improving cooperation between colleges.But all of these options would likely take from several years to a decade or more to have substantive impact. So is there a viable short-term option to improving affordability? Yes. We can improve federal student loan financing. Now.
Federal student loan programs have some special repayment options, such as income based repayment and extended repayment, to improve affordability for certain borrowers. But as helpful as these are, they are likely to only help a minority of borrowers. That’s not enough to meet current and coming affordability challenges. We need to reduce monthly payments for all students, and we can. Given that education provides a lifelong benefit, we should finance it accordingly: let’s extend all federal direct student loans so they are repayable over 20 years instead of the current standard 10 year term. Loan size limits should remain unchanged – so there is no “ballooning” borrowing. This change would cut the standard loan payment of students by about 35% — a significant broad-based increase in affordability.
As Melanie Brealt of the Nation put it, in agreeing with Proto:
The goal of student loan reform should be to encourage students to go to school, whether it is career schools, community colleges, private four-schools, or whatever institution fits their needs. If we take away the default risks, then these students, their families and taxpayers will be more willing to make that kind of sound investment, even in this depressing economic environment.
So while we haven’t yet solved the crisis in the cost of education, wouldn’t this be a good start? I agree with Randy Proto and Melanie Breault. Let’s do it.
*Full Disclosure: I am proud to be assisting Mr. Proto in getting out this message about the need to make higher education more affordable to all who wish to pursue it