For many students, the beginning of each academic year brings more than just new classes, new professors and new living spaces. It also adds the weight of tens of thousands of dollars in student debt. Student loans are a crucial tool in the face of huge and rising tuition prices, but the inevitable outcome substantial debt creates a crippling financial burden on large numbers of young people.
According to a March statement by the Consumer Finance Protection Bureau, total outstanding student loan debt has reached one trillion dollars, topping most other forms of consumer debt. As college tuition costs continue to increase and the economy remains unstable, more students take out loans, on which they subsequently default. According to the Federal Reserve Board of New York, of the 37 million student borrowers nationwide with outstanding debt, more than 15 percent have at least one loan account that is past due.
Tufts students are not exempt from this trend. Tufts does not offer need-blind admissions, meaning that admissions officers are aware of the number of prospective students seeking financial aid to an institution whose tuition and fees have inched up over the years.
Tufts total cost for the 2012-2013 academic year sits at over $56,000, placing it among the countrys priciest universities. According to Director of Financial Aid Patricia Reilly, close to 40 percent of Tufts students graduate with some form of student loan debt. The average total debt from both Tufts and federal loans and grants amounts to nearly $17,000, Reilly said.
Junior Walker Bristol sees the tangible effects of those statistics.
Personally, Im really fortunate [because] I wont have extraordinary debt when I graduate, he said. But I have some friends who will [graduate with] enormous debt.
Senior Benjamin Serrano receives financial aid in the form of loans and grants from the federal government, as well as loans from Tufts.
I need financial aid to attend Tufts, Serrano said. I wouldnt be able to go here otherwise.
Student loans can be broken down into three broad categories: federally guaranteed loans distributed through banks and other lenders, federal loans distributed directly by the government (Stafford loans) and private loans. The government also distributes grants, known as Pell grants, to low-income students.
In 2009, the Obama administration pushed the House of Representatives to pass legislation that would increase federal direct loans and cut out banks as the middlemen for lending.
Professor of Political Science Kent Portney said that despite encouraging measures like these and talk from both Democrats and Republicans about making college affordable and easing student debt, the fundamental problems remain unresolved.
I think the rhetoric that you hear coming out of Washington far outstrips anything thats being done, he said. Nobody that Ive heard in Washington has come to grips with the fact that its a very expensive thing to provide higher education.
According to Portney, the federal government has two options for lowering college costs: subsidize them further, which would add to the already enormous federal deficit, or cut college programs. Neither of these choices seems feasible, he said.
If you want your tuition to be lower at Tufts, it can be lower, but then youll have to cut departments, youll have to cut faculty, youll get a lesser education, Portney said. Ive been on various budget committees at Tufts
and theres not a lot of fat on the Tufts budget, its a very lean budget.
During his term, President Barack Obama has made several changes to help students with their loans and debt. According to his official website, these include the Income Based Repayment (IRB) plan, which lets students cap their required monthly loan payments at 10 percent of their income, and Public Service Loan Repayment, which forgives all student loans within ten years for those working in public service fields.
Portney explained that Obamas apparent commitment to easing the burden of student debt, as well as the pre-existing tendency for younger voters to vote Democratic, could work to his advantage in next months election.
I think its pretty clear that the Obama campaign has tried to mobilize young people, college students, around issues of financing higher education because its such a salient issue for so many people, he said. Almost from the day he took office, he tried to make sure that this was his issue, that he would own this issue.
Bristol agreed that student loans have increasingly become a decisive campaign issue for many students.
The student vote goes naturally to the left, but as students grow more and more disillusioned with they way things are, there are people who are voting based on student loans, he said.
The campaigns of Obama and former Massachusetts Governor Mitt Romney both emphasize their commitment to higher education, with goals such as higher graduation rates, reduced costs and financial support. However, each candidate proposes methods that are drastically different.
Some of Romneys proposals include restoring the role of private lenders in federal student loans, simplifying student aid by cutting education tax benefits, instating stricter limits on federal grant eligibility and cutting IRB and loan forgiveness programs such as Public Service Loan Repayment. Vice presidential candidate Paul Ryans congressional budget plan would restrict eligibility for Pell grants, preventing up to one million low-income students from receiving this aid.
Ultimately, I think the Republicans and Romney tend to see the federal [student loan] program as part of big government
and they want to cut that, Portney said. If you look at the Ryan budget, there are substantial cuts to federal student loans, to Pell grants. So how will students be affected? It will be harder to get loans.
Meanwhile, Obama signed legislation in 2010 that expanded direct government lending and has proposed increasing the maximum Pell grant amount in line with inflation and rising tuition costs. This summer, Obama pushed a measure through Congress that prevented interest rates on subsidized Stafford loans from doubling from 3.4 percent to 6.8 percent.
Romney has also made controversial remarks surrounding student debt. Last spring, he told Ohio students at a campaign stop to take a risk, get the education, borrow money from your parents if you have to, start a business, a quote since reapportioned by the Obama campaign as a point of contrast between the sitting president and his Republican rival.
In the Massachusetts race for Senate, the respective positions of Senator Scott Brown (R-Mass.) and Elizabeth Warren fall mainly according to party lines. Brown (LA 81) opposed the bill stabilizing interest rates on subsidized Stafford loans, a bill for which Warren has voiced support.
According to Portney, the rise of tuition costs is an economic problem that cannot simply be stopped by either a Romney administration or a second Obama term.
Even if Obama is elected, I think that trend is going to continue. The best Obama can do is slow down that trend, he said. The only thing that can stop this is if Congress and the state legislatures realize the shortsightedness of what theyre doing and start to subsidize higher education.
As they stand now, high costs, loans and formidable amounts of debt are all issues that will continue to impact students across the country, even influencing career choices. Senior Lecturer of Education Steve Cohen said that many college students feel compelled toward high-income jobs as a way to deal with their debt.
I would never say that Im the spokesperson for your generation, but as I look at kids that have come through my classes and my own kids, I would say there is real pressure for a lot of students, he said. Youve got to get a job thats well-paid, and thats really hard, and that does limit options.
Portney agrees, attesting that the values of the coming generation of young professionals are impressionable.
As a cohort, as a generation, you will be saddled with huge debt, Portney said. It means that every college student will feel the pressure to go into a profession where they can make more money rather than less money ... That has implications for the character of our society.
Serrano, who is majoring in English and plans on becoming a teacher, said that he has received incredulous reactions to his liberal arts major and relatively low-income career goal.
I keep getting told, Oh, youre doing English, thats risky, he said. When people hear vague majors like that, they say, Youre not going to be able to get a job that will let you pay off your loans because your major wont give you a real job.
Cohen cited his experience talking to many students who aspire to become teachers and the obstacles they face.
Some of them actually have very little parental support for that, because they say, Well youre a teacher, howre you ever going to send your kid to a place like [Tufts]? which is not a bad question -- its really hard, he said.
According to Bristol, looming debt and a poor job market are overwhelming for many students, as they seem entirely out of individual control.
[There are] these
unfeasible expectations, he said. People always say, The young people, the students, theyre going to build the economy back up how can we possibly maintain those expectations?
Both Bristol and Serrano are in the process of applying to graduate school, which can add a huge amount of debt because most graduate schools do not offer need-based financial aid, according to Reilly. Graduate students do not receive subsidized federal loans, meaning that their interest is constantly accruing, Reilly said.
Whats sometimes scary is when we have graduate students in the arts and sciences that are getting masters [degrees] and Ph.Ds in fields that might not be as lucrative, and theyre borrowing a lot of money, Reilly said. Those are the students I worry most about, because they dont have a lot of financial aid and
they are borrowing $40,000 or $50,000 a year, in order to get a degree that might not get them a job.
However, Reilly explained that relatively few Tufts students who receive federal aid default on their loans. The Cohort Default Rate, or CDR, is a government program that calculates the percentage of students at a given school defaulted on their federal loans. The national CDR is around eight percent, while the Tufts CDR is 0.8 percent.
Tufts offers several financial aid programs to help students manage their loans and pay off their debt, according to Reilly. The Loan Repayment Assistance program gives aid grants to Tufts graduates who work in public service and are paying off their student loans. Tufts has also recently teamed up with American Student Assistance to offer a new program called SALT, which gives students online tools for debt management and financial literacy. This program can help calculate how to incorporate paying student loans into a student budget.
Yet the bottom line is that the high cost of tuition simply prices out low-income students, Portney said.
There is a dominant view in this country that, although you hear all this talk about the importance of education both to our individuals and to our economy, when you cut through the nonsense, all theyre really saying is if you cant afford a college education then dont get a college education, he said. The idea that everyone whos qualified should get a college education, that is long gone.
Bristol also expressed frustration at the unequal playing field when it comes to college debt and paying it off.
Thats the narrative of the American dream you go to college and then you climb up the social ladder. Its an image of equal opportunity, he said. [But] people arent coming from the same opportunity to pay off their debt, people arent treated the same when it comes to student loans.
Tufts is not immune to these larger societal inequalities, according to Portney. Although Tufts switched to a need-blind policy in 2007 and 2008, the Office of Admissions reverted back to need-aware admissions in 2009.
The change did not hold because it was established as a spend-down program, University President Anthony Monaco told the Daily in an article published last April. The funds for the program came from a large donation to the university and once they were exhausted, need-blind admissions were discontinued. Monaco estimated last spring that to practice entirely need-blind admissions, Tufts would need $400 million of endowment strictly allotted for the program.
Portney feels that as a result of need-aware admissions, the university only accepts students within a certain financial range in order to meet its annual operating costs.
Tufts doesnt admit poor people, Portney said. Its hard for us to acknowledge that sometimes, but Tufts doesnt admit poor people because they cant pay the bill or even a portion of it.
