The effects of our current struggling economy are far reaching. Among the effects are cuts in public services. Some of the hardest hit institutions are California’s higher public education systems, and their students who often take out sizable loans to afford college.
To help students touched most by these circumstances, President Obama and Education Secretary Arne Duncan released a new plan, via executive order to bypass the slow and dysfunctional congress, to help ease the burden on students from their loans.
Their plan includes a “pay per earn” style in which students can pay back their loans in correspondence to what they are earning after graduation.
Another modification will be the amount of interest banks could charge on student loans. Under the new plan, banks would only be allowed to charge 10% at most, down from the current top rate of 15%.
Lastly, all money owed would be forgiven after 20 years if the student proves that they cannot pay it back. The plan is set to take place in 2014. However, the White House wants to implement it by 2012.
Such a plan is welcome news for students of California’s struggling colleges, as illustrated by a troubling College Board report on tuition statistics.
In the United States, the national average for tuition went up by about 5.6% from the 2001-02 to the 2011-12 school year. In California alone, tuition skyrocketed by 21%. Their findings also showed that students were leaving school with approximately $21,000 in student loan debt, and since jobs can be few and far between for many graduates, this creates a major problem.
In the University of California system, tuition is constantly on the rise. Just recently the UC tuition fee has risen 17.6%, doubling since 2005- 06 school year.
This is also true in the California State system, which is usually less expensive than the UCs, as the CSU board voted to increase tuition by 12% last July. The price increase has become a burden on families struggling to make ends meet.
Albany High students need help paying for college just like everyone else. Doug Kagawa, longtime AHS counselor explains that people’s decisions on whether or not they can attend a four year university is largely based on finances.
Kagawa said, “When someone is accepted, they are sent all the costs. The family will lay it out on the table and decide whether or not they will able to afford this.”
President Obama hopes their new plan will help ease the pain of college tuition on families, and help make higher education a very real possibility for everyone, regardless of economic standing.