Student loans are a hot-button issue in this year’s presidential campaign. In last week’s presidential debate, Barack Obama and Mitt Romney proposed only slightly different solutions on topics like energy, health care and private sector job creation, yet the pair of candidates possess almost opposite views on Pell Grants, Stafford Loans and the system of student debt and student loans in general.
Evaluating the candidates’ plans side-by-side, Obama’s plan for student loans promises to be best for college students.
Romney’s plan, entitled A Chance for Every Child, seeks to restore the roll of private sector student loaners, effectively reversing Obama’s attempt to cut them out of the process. Rather than utilizing direct government loans, Romney seeks to channel government money into rewards for private loan offices like banks that offer reduced rates. Romney’s plan also supports devoting less to government-issued loans for higher education institutes and more to vocational schools, online education and private on-the-job training. Failing that, there’s Romney’s now-notorious advice from a few months ago on the campaign trail: to “borrow money, if you have to, from your parents.”
According to a speech Obama made in May, the President believes that “higher education can’t be a luxury – it’s an economic imperative that every American should be able to afford.” Obama seeks to reduce reliance on private sector loans and, perhaps most importantly, create a safety net for college graduates working in a public service field. Obama’s pay-as-you-earn Income Reimbursement Plan caps monthly loan repayment at 10 percent of one’s income – which is crucial, considering the difficulty of landing a high-paying job fresh out of college in today’s job market. Obama’s plan also includes a 20-year loan forgiveness plan, wherein students with outstanding debt 20 years after graduation who have promptly paid their monthly loan repayments can have their debts erased.
Although the Congressional Budget Office’s website says removing banks as the middlemen will save taxpayers around $58 billion dollars over the next decade, Romney still believes that having banks intimately involved and receiving rewards is the best way to tackle the issue of student loans. The problem with that notion – and his plan in general – is that it does not place students as the priority. By lowering the amount of the Pell Grant and raising the monthly repayment cap, Romney makes it clear that his allegiance lies not with students, but with lenders.
On the other hand, Obama has made it clear through his policies and re-election platform that the way to improve the job market and the country lies in the hands of our youth – a group that cannot spend or innovate if it is drowning in debt from banks, which by and large do not provide long-term forgiveness plans. By removing the subsidy to banks, Obama’s plan simplifies the process and provides a better safety net for students.
The Nov. 6 election could spell out big changes for Jumbos, who attend one of the most expensive universities in the nation. On average, Tufts students graduate with $17,000 in debt, but perhaps increased federal grants and protection from overwhelming debt can help assuage those fears. Viewing the facts, it’s clear that Obama’s student loan plan empowers the student more than Romney’s does.