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I have major issues with higher education. I am one of so many college graduates (class of '93) who were sold a bill of goods regarding college that was never delivered. My first job with a college degree was at Godfather's pizza in Helena, Montana. My second job was at Hastings Book, Music, and Video. These are perfectly acceptable jobs for a person holding two bachelor's degrees. I now work in a field that is wholly unrelated to either degree, a field that I could have gotten into by taking one certification course for $2,000.
I'm still paying for my basically worthless education (thank you North Central College for your uselessness) and will be paying for it for many years. As a child of a lower-middle class family, I got some financial aid but not enough. I maxed out on the aid my senior year and had to finance my final year on credit cards. So not only did I leave college with a massive amount of student loan debt but also credit card debt.
I'm a firm believer that colleges and universities see how much money a student is eligible for and raise their tuition accordingly. If they don't get the student to max out on loans then they are leaving money on the table. That is bad business, and let's not fool ourselves, higher education is all business.
Dean's plan directly addresses the issue of financing and unfortunately doesn't address the issue of preventing students from studying things that have a poor return on investment (e.g. Political Science and Philosophy, just to pick two totally random majors out of thin air, not like I have anything to do with either).
Opening the Doors to Higher Education for All
Higher education is the pathway to a better life for millions of young people. Parents, educators and students themselves understand that education is directly linked to success – economic, professional, and otherwise – later in life. And businesses understand that American economic growth depends on a steady supply of highly educated and skilled workers.
Yet, America’s system of financing college education leaves too many students and families struggling to cover college costs. No matter how hard parents are working, they are finding it harder and harder to keep up with the rising costs of higher education. Parents worry about their ability to provide for the children’s education, and too many young people give up on high school because the doors to higher education appear closed by the prohibitive cost. Typical student debt has doubled to $17,000 over the last decade, and more than one-fifth of all full-time students now work full-time to cover college costs.
This country cannot afford for college to be an ‘elites only’ program. Every family should know that that their children will be able to afford to go to college, and every young person needs to know at an early age that nothing will keep the door to college closed for them.
The College Commitment
Governor Dean’s higher education plan will guarantee every young person access to an affordable four-year college education. The “College Commitment” guarantees that every student who commits in eighth grade to working hard in high school and to pursuing a higher education will have the resources to earn a degree.
Through the College Commitment, eighth graders will be asked to commit to prepare for college and to graduate from high school. The commitment to them in return is that:
- They will have access to $10,000 per year for postsecondary education—traditional college or high-skills career training.
- They will never have to pay more than 10% of their income after college on student loan payments.
- If they go into public service, they will never pay more than 7% of their income -- if they enter fields such as nursing, teaching, law enforcement, or firefighting in high need areas.
- If they work and make loan payments for 10 years, their loans will be paid in full.
How it works
$10,000 in financial aid
Any student who participates in the program will be guaranteed $10,000 in annual student aid if, by the end of middle school, they agree to prepare for, and apply to college. Schools will develop plans with each family and student, including college preparation courses to be taken in high school. Families will receive advance determinations of their eligibility for federal financial aid so they can understand that college will be a realistic option, and they will receive assistance in developing a savings plan for college expenses. The exact mix of loans and grants will depend on family finances, but states will be encouraged to front-load grant money in the first two years.
10% of Income Limit on Repayment
After graduation, borrowers will pay back their loans as usual, but all borrowers (including those who do not owe income taxes) will be eligible to receive a refundable tax credit for any amount that exceeds 10 percent of their income. For married couples, the tax credit would be available if combined loan payments exceed 10% of combined income. Borrowers must be working to be eligible for the tax credit.
Public Service Corps – Public Service Saves You More
Those who enter public service professions will get a special bonus. Nurses, teachers, social workers, law enforcement officers, firefighters, and emergency medical technicians in high need areas will receive a refundable tax credit for any loan repayment in excess of 7 percent of their income.
10 years and You’re Done
Those who make payments on a standard 10-year schedule will pay off their loans in full. Most current “income-sensitive” or “income-contingent” loan repayment plans stretch out payments for up to 25 years. Borrowers would still have the option of taking advantage of those repayment plans to lower their annual payments, and would still be eligible for the tax credit when their payments exceed 10% of income.
Earn more through National Service
In addition to the Public Service Corps, Dean will boost opportunities for Americans to serve their communities while earning additional money for education, by increasing the number of AmeriCorps positions to 250,000. Of these, 50,000 will be dedicated to new “Frontline” public safety national service programs, which will provide opportunities for young Americans to serve for two years as firefighters, emergency medical technicians, and forest and park service rangers, enhancing our nation’s safety and security.
As a nation we face challenges to successfully educate our children, to safeguard our citizens and communities, to enhance public safety and public health, and to keep our rivers, lakes and streams, and national and state parks and forests clean and safe. “Frontline” programs will help encourage more people to enter these fields while further opening the doors of opportunity for those willing to staff the “frontline” here at home.
Cost
Governor Dean’s Higher Education program will cost $7.1 billion annually at full implementation: $6 billion for the College Commitment and $4.7 billion over four years for the expansion of AmeriCorps. The cost of these programs will be paid for by repealing the reckless Bush tax cuts and using the money to ensure that every American family had access to health insurance and to higher education.
Elements of this plan that I believe are winning elements are giving a tax credit for payments above 10% of income.
Instead of forced public service, the plan allows for true volunteerism and rewards it. Far better to use a carrot than a stick and far better to always allow a person to make a choice instead of choosing for that person.
Opening up the volunteer programs to provide extra support for critical areas of national safety while providing solid skills and knowledge that will allow the person to get a worthwhile and rewarding career.
Using the program to encourage students to choose careers in teaching and nursing, two areas that we are suffering a shortage. I can go on about how more nurses improves the overall health of the nation, limits stays in hospitals, etc. but I won't. More teachers unfortunately doesn't translate into better teacher to student ratios, as that is more a factor of school funding, but it allows schools to have a deeper pool of candidates to choose from.
This plan is simple and straightforward, using elements that are already in place and linking them together to help families pay for college. One thing to note is the plan helps families start earlier. They will start thinking about college while the kid is in Junior High instead of a Junior in High School. I know from my experience, I would have been better prepared and may not have made so many poor decisions regarding my higher education. Other people's mileage may vary, but I see how I could have benefited from this plan and I know others will also.
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