The Fight over Continuing Student Loan Subsidies

Wednesday, May 2, 2012 at 2:00 AM by

Seldom has there been stronger public support for the notion that higher education is a critically important route for achieving the American Dream.  A recent study by the Pew Center on the States reports that Americans believe access to a quality education is the most important way the government can help people get ahead.

Despite that public support, the future of federal subsidies for student loans is at risk, and the student loan interest rate could soon double to 6.8 percent – compounding the problems caused by state-level cuts in funding for higher education and student financial aid. Although both parties in Congress have said they want to maintain the lower interest rate, they remain very far apart on how to find the $6 billion annually to continue the loan subsidies.

A post today by OMB Watch examines the competing proposals for maintaining the subsidies for the Federal Guaranteed Student Loan program. It provides a nice summary of the program’s history, information on the exploding cost of college education, and a discussion of the consequences to students of not continuing the loan subsidies.

A new report from the Center for Postsecondary and Economic Success examines the potential return on investments in higher education.  See their Wisconsin fact sheet.  

Jon Peacock

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