TERRE HAUTE —
Who hasn’t gotten this message yet? The cost of a college degree has become unaffordable for a wide swath of middle-class America.
Most folks have heard of that predicament. The statistics aren’t hidden in some sort of “National Treasure” scavenger hunt. As The Associated Press reported again last week, two-thirds of U.S. students graduate with more than $25,000 in loan debt. The cumulative student-loan debt in the nation hit $966 billion in 2012, up 10.5 percent from 2011, according to a Philadelphia Inquirer story. Other categories of private debt have dropped 18 percent since the housing crisis and recession hit in 2007, but total college student loan debt has skyrocketed 56 percent in that same stretch.
Again, this is not top-secret information.
The median household income in Indiana is $48,393 a year. In Terre Haute, it’s $31,838. One in 10 college graduates in the U.S. owes more than $54,000 in student loans.
This is a problem, especially in a nation in need of a better educated, better trained workforce to compete in the rapidly developing, technologically advanced global marketplace.
As such, families and young people have pleaded with their state and federal leaders for action to cap or reduce tuition and lessen the cost of loans.
Congress’ response? Inaction.
Thus, incoming college freshmen could pay $5,000 more for the same student loans their older brothers or sisters incurred, if Congress fails to stop an automatic doubling of interest rates before a July 1 deadline. And, really, why would Congress start functioning now? Its members seem quite content to let the daily business of running the government stall and stumble just to score political points — Republicans vs. Democrats, the House against the president, tea partiers and super PACs vs. the moderates. They cook up one standoff after another, from the Debt Ceiling to Fiscal Cliff and Sequestration.
Meanwhile, families who hoped they’d see college prices decrease, or at least level off, could see them go even higher. Their hope for relief is dwindling as summer approaches. The issue could have been dealt with in 2012, but that was an election year. Instead, students got a one-year reprieve from a doubling of interest rates from 3.4 percent to 6.8 percent on new subsidized loans, and that extension is almost over. (Students with outstanding subsidized loans will not see their rates rise unless they take out a new subsidized Stafford loan. Likewise, non-subsidized student loans and loans from commercial lenders are not expected to change.)
Curiously, interest rates for auto and home loans are low.
“Burdening students with 6.8-percent loans when interest rates in the economy are at historic lows makes no sense,” Lauren Asher, president of the nonprofit Institute for College Access and Success, told The AP.
Is there hope? Congress would have to do what it now does so poorly — reach an agreement. The House Republican spending plan would shift student-loan rates to pre-Recession levels, meaning higher. Rates dropped to 6 percent in 2007, then 4.5, and then 3.4. House Education Committee leaders, from both parties, want rates at their current levels. Senate Democrats say their budget will keep rates low, but don’t explain how they’ll cover the $6-billion pricetag. President Obama will unveil his budget in the next few weeks.
When an education becomes too expensive for a young American to acquire, potential is wasted. Congress has shown that this sad problem is not among its priorities.