What Will Dean Do If Elected? Part II - Higher Education

[LuminousX]

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.

[helleborient]

1. This approach to volunteerism is a better approach than the...

Required public service approaches I have seen.

This approach identifies specifically the areas targeted for the public service and works within the Americorps system that is already set up.

I have mentioned elsewhere a key concern I have about simple forced volunteerism is that the federal money needed to administer such a program may not be available.

By funneling through Americorps, as long as Americorps is fully funded, the money is available for a system to administer such a large volunteer program.

Public service/volunteer programs are not simply big ole chunks of free work time given to organizations...someone has to be paid to train and/or schedule that work that will be done.

[LuminousX]

2. My other fear of mandatory volunteerism

One argument presented for mandatory volunteerism is it is community directed so the community can make the proper allowances for the participants. What I fear would end up happening are a bunch of make-work programs to appease the requirements. So there won't actually be any good coming from forced volunteerism... there won't be people helping out at the senior citizen's home or the soup lines. Instead they will be painting the high school gym at lunch, putting the chalk lines down on the track, hanging Christmas lights, or allowing certain club activities to count towards the volunteer requirement.

If it is going to be done, then it needs to be channeled appropriately. But once you make it a requirement, then you have to set up ways for students like myself who lived an hour out of the city, who had only one way to and from school (bus), to meet the requirement which means extra money. I don't even know how I would have been able to do it. It was a big deal for my folks when I joined Model UN. Most of the time I had to find a friend who drove to take me part of the way home and my parents to pick me up from there.

[sandnsea]

3. This plan has some drawbacks

First, what about the vast numbers of kids who are floundering around in 8th and 9th grade, have no self-esteem, can't see to the end of high school, let alone college. Alot of these kids get it together in 10th or 11th grade. Dean's plan seems to leave them out. Edwards' guaranteed college is a better way, as far as motivation, because the kids know it's there from first grade. It's just based on GPA at the end of high school.

The 10% pay-off allows students to go to the most expensive college with no thought to the cost of paying it off. The debt left to the government is going to be very high. If this ever got passed, I don't think it would last long.

Kerry's plan is nearly the same as to community service, 2 years service, 4 years college. Nothing forced about it. And the money earned there can be applied to a small business and I think even a home. The 'forced' volunteerism is a high school class.

Kerry introduced the current Nurse Reinvestment Act which gives students stipends and loans if nurses agree to work in areas of designated need, and there's alot of them. There are also already loan cancellation programs for teachers and I think doctors and a few other public service fields as well.

Kerry's plan also has refundable tax credits up to $4,000 a year which can help pay for college as you go, they're refundable. I don't think there's any requirements for to get these tax credits.

I understand about your job situation, college isn't a guarantee. And the loans are so high. My son wants to be a teacher and when I look at the cost of student loans I just have to wonder how much logic there is for him to do that. But if he doesn't, then what. It's tough to know what to do anymore.


On edit:

The Nurse Reinvestment Act actually pays off the loans or gives grants. The nurses have no student loans left over at the end of their work requirement.

[LuminousX]

4. 10% clarification

The 10% pay-off allows students to go to the most expensive college with no thought to the cost of paying it off. The debt left to the government is going to be very high. If this ever got passed, I don't think it would last long.

The repayment isn't capped at 10%, it just means everything above 10% gets a tax credit. The plan also starts working with families early to see what money will be available so a reasonable school can be selected. Again, I lacked that and I chose an unreasonable school, too expensive for my income. I could have used the same guidance first time home buyers get, and why not, the price of a college education is almost the same as a first time home.

Sorry, I slipped from the point. The government won't be holding the bag for everything over 10%.

I also agree that there are some problems with this plan. I would have liked to have seen adult education addressed as well as some safeguards. There are kids who will fall through the crack and that isn't fair. While life as a whole isn't fair, we should be doing everything we can to be fair.

[sandnsea]

5. You have to take a class

My daughter has student loans right now and she has to take a class every year in order to get her student loans. She's well aware of the costs of her loans, the repayment amounts, and how that balances against her future income. She's going into nursing though, so that field pays better than teaching. At least for now. They're recruiting foreign nurses too, so I worry nursing will be the next HB-1 visa scenario. I hate this shit.

The thing I like about the $4,000 refundable tax credit is that I think it expands the Hope Scholarship Credit. Last year her boyfriend took a contractor's course and it was paid back to him out of that credit. It's applied as you go, so no interest accumulates. If colleges were to make payment plans to account for a $4,000 tax credit, that would help more than any student loan repayment plan, it seems to me. Interest is what kills you and I don't think Dean's plan takes that into account. And there are also alot of repayment plans based on income anyway.

The final thing that I think people have to get a grasp on is that if we're going to have to continually 'retrain', then there needs to be a very affordable method to do that. It's nuts for the government to give all the help to business to retool and gear towards new businesses and then leave the workers to pay their own retraining costs. Again, I just hate how difficult it is to even subsist in this country for way too many people.