Column: Obama’s provisions could increase student debt

By Matt Bruenig

Oklahoma Daily, U. Oklahoma via UWIRE

President Barack Obama released his proposed budget for the upcoming year Monday. The $3.7 trillion behemoth is massive and involves various efforts to shift money around, some cuts, some increases — the usual.

Included in this budget are two provisions that are relevant to both undergraduate and graduate students at OU.

The first provision is one which eliminates summer school Pell grants — federal money provided to students of low-income backgrounds. The elimination of summer Pell grants is particularly problematic because poor students are more likely to work during semesters and therefore need summer credits to stay on schedule.

The inevitable rise in tuition or fees that will be coming to OU and other schools across the country will multiply the impact of these cuts. Raising costs and cutting aid is a sure way to increase the burden on the poorest students.

In addition to the Pell grant change, loans taken out by graduate students will begin gaining interest as soon as they are taken out. Graduate students will not have to pay off the interest until they are out of school, but upon graduation, with this subsidy removed, their debt burden will be considerably higher.

These two measures fly in the face of the rhetoric of educational investment. It is unclear how education is supposed to benefit from legislation that makes it less accessible to poorer students and increases the already record-high debt that students have when they leave college.

When you combine these provisions with other figures relevant to college graduates, the picture becomes even grim. The percent of recent college graduates who have managed to secure full-time jobs has dropped from 83 percent in 2007 to 74 percent in 2010, and those statistics say nothing about the kind of full-time jobs these graduates are moving into (no doubt many are under-employed).

So, to sum it up: the price of college is going up, the aid to pay for college is going down, debt for college students is at record levels (average debt is $24,000) and employment prospects for graduates are diminishing.

Those figures basically speak for themselves. The government, and society in general, is trying to pay for this recent financial crisis on the backs of students. Instead of increasing taxes on the rich, the class whose risky speculation caused the problem, it is the students who must shore up the budgets of the federal and state government.

This is nothing new, nor is it limited just to students. Consider attacks on Medicaid in Texas, a program which helps poor people get health care. Did poor children and public workers cause a bubble that wrecked the economy? No, but they sure will be called upon to pay for the aftermath of it.

Making sure everyone but the super-rich pay for economic pitfalls is so common a strategy that every time I hear people talk about “shared sacrifice,” I cannot help but laugh. Once again, students, workers, teachers and poor people will all be asked to tighten our belts and pay more.

I wish I could say I am confident that it is only these cuts that we will suffer, but I am sure slashing Pell grants and graduate student aid will be the tip of the iceberg.

Read more here: http://oudaily.com/news/2011/feb/15/column-obamas-provisions-could-increase-student-de/
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