Student Loans

Classes may be done for the summer, but many college students are wondering where they will get the money to return to school in the fall. According to the U.S. Census Bureau, between 1993 and 2011 the average student loan debt for Americans with a bachelor’s degree jumped by more than 82 percent, to $27,547. To add insult to injury, on July 1, the interest rate on Stafford loans doubled to 6.8 percent after Congress failed to pass legislation preventing the automatic rate hike. And they could stay doubled unless Congress lives up to its promise of restoring lower rates after it returns from the Fourth of July holidays. For many students this will mean working more hours or borrowing more money from their parents in order to return to school in the fall.

To look at it another way, a report in USA Today found 265 colleges and universities across 40 states where the loan default rate is already higher than the graduation rate.

One interesting solution to the tuition crisis is Oregon’s “Pay It Forward, Pay It Back” pilot project. The concept calls for students to attend public universities tuition-free and loan-free. In exchange, students would have 3 percent (1.5 percent for students who graduate from a two-year college) deducted from their post-graduation paychecks for about a quarter-century. This money would go into a fund to pay for future students. The bill, which passed unanimously on the same day that federal student loan rates doubled, is expected to be signed this month by Gov. John Kitzhaber and directs the state’s Higher Education Coordination Commission to develop a Pay It Forward pilot project for consideration by the 2015 Legislature. Initial start-up costs are an estimated $9 billion, since the first group of students to attend tuition-free are years away from their first real jobs.

There is always hope, but it may take a miracle for Congress to agree upon a plan that will allow student loan rates to drop. Hopefully Oregon’s Pay It Forward plan will provide a solution to the cost of college crisis for students and their families!

This article originally appeared in the College Planning & Management July 2013 issue of Spaces4Learning.

Featured

  • MiEN Releases White Paper on Community College Space Innovation

    MiEN Company recently released a new white paper called “Designing New Innovative Spaces for Community Colleges” to address the needs of community colleges post-pandemic, according to a news release. The eight-page guide by Dr. Christina Counts, MiEN Company VP of Education and Marketing, covers topics like the enrollment drop that these schools have seen since COVID-19, the roles they play in higher education and local workforces, and five suggested key changes that can improve students’ experiences.

  • New Jersey PreK–12 School Breaks Ground on New STEM Building

    Saddle River Day School (SRDS) in Saddle River, N.J., recently announced that it has broken ground on the new Dr. Kristen Walsh Hall of Science & Entrepreneurship, according to a news release. The school partnered with DIGroup Architecture for the design of the new facility, which will provide the school with space to expand its STEM and business education classes.

  • modern college building with circuit and brain motifs

    Anthropic Introduces Claude for Education

    Anthropic has launched a version of its Claude AI assistant tailored for higher education institutions. Claude for Education "gives academic institutions secure, reliable AI access for their entire community," the company said, to enable colleges and universities to develop and implement AI-enabled approaches across teaching, learning, and administration.

  • Image courtesy of Armstrong International

    The Modern Hot Water System Approach to Keep Higher Education Buildings Safe and Operational

    Higher education campuses face unique structural and operational demands. With a range of old and new buildings, a variety of facility types, and ambitious sustainability goals, it's essential that no aspect of infrastructural performance is overlooked. Facility managers must be equipped to provide a safe, reliable and efficient space for students, faculty and guests.

Digital Edition