Remember the Obama administration official who said judging colleges was like “rating a blender“? Not so, says Reason, because “unlike blenders, colleges obstruct efforts to test their performance”:
Uncle Sam hands out $150 billion in financial aid to universities every year—about twice as much as all the states combined. Yet, notes State University of New York-Albany’s Ben Wildavsky, colleges resist independent, national, standardized testing that would allow lawmakers to judge what exactly this aid is accomplishing—and give parents the information to determine the educational bang they are getting for their buck.
The administration’s proposed “scorecard” includes what’s known as a loan forgiveness provision:
Currently, “new borrowers” who obtained their first federal student loan after 2007 are eligible to signup for something called the “Pay As You Earn” program. This program caps their loan repayment at 10 percent of their income for 20 years after which the remainder is written off. … In other words, students take loans according to their needs, and repay them according to their ability and hit taxpayers for the rest. The president wants to expand this socialist prescription to all students who receive federal loans.
Even Sallie Mae, the government’s student-debt manager, acknowledges that costs are skyrocketing – up “27 percent beyond inflation over the last five years” — in part because “parents are picking up an ever smaller share of their kids’ college costs and the government (and other) grants ever more,” Reason says.
Read the whole article here.
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This funny student loan “horror” video is making the rounds online. It would be more funny if it weren’t so real…
The comment thread on YouTube indicates that quite a few young people out there can sympathize with the lady in this video.
YouTube user Leu Yang wrote: “No too real man, just too real.”
Roberta Las Casas wrote: “OMG can you imagine this for real!!! I would have one of those suckers at my house everyday!!! LOL”
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Fox News reports that the deal struck Thursday to lower student loan rates back to their pre-July terms is already prompting criticism from some who called it a stopgap measure instead of a permanent solution:
A highly touted student loan “deal” began to run into criticism Thursday as advocacy groups and Democratic lawmakers complained it would merely provide short-term relief in exchange for higher borrowing costs on future students.
A few years from now, students with subsidized loans could easily be paying far higher rates than the average person paying off a car loan. In the near-term, the college agreement would rein in student loan rates, which for new subsidized Stafford loans had doubled from 3.4 percent to 6.8 percent at the beginning of the month.
Under the deal, undergraduates this fall could borrow at a 3.9 percent interest rate.
But higher rates would still loom. The rates would only last through the 2015 academic year, after which interest rates are expected to climb above where they were when students left campus in the spring. Rates for undergrads would be capped at 8.25 percent.
Sen. Jack Reed, D-R.I., was one of the first senators to criticize the plan, after the official roll-out of the proposal earlier Thursday.
“Instead of preventing the doubling of these rates to 6.8 percent, it would gradually raise these rates above 6.8 percent,” he said in a statement. “We might see one or two or three years of rates that are relatively below that number, but inevitably, mathematically those rates will go beyond 6.8 percent. And the caps are rather high.”
Liberal advocacy groups echoed the complaints.