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Fixing student groans

BY CHRIS CLARK | FEBRUARY 04, 2010 7:30 AM

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While the frightening thought of entering an unstable market has persuaded me and many other college seniors to choose alternatives, President Obama’s proposed budget may change some minds — and rightfully so.

It clearly demonstrates his dedication to the success of our generation and the faith he has put in us to help stabilize a broken economy.

The job market is the worst it has been in decades, so the words “after graduation” have become taboo on campus. The national unemployment rate in May 2009 was at 9.4 percent, and it has only gotten worse. In December 2009, unemployment hit 10 percent. In Iowa, unemployment in December 2009 had risen a full point — to 6.7 percent — since last May.

If you’re looking for an above-average job, a high-school diploma is not likely to be sufficient. And a college degree is becoming more expensive by the year.

But Obama’s proposals, if adopted, would make college degrees a bit more practical for high-school grads.

In his State of the Union address last week, Obama placed job creation at the top of his to-do list, putting $100 billion in next year’s budget for the initiative.

Congress should pass this proposal with no contention.

Obama also laid out a plan that could relieve students of some of the burden of student loans.

College graduates are currently required to pay back student loans with 15 percent of their income monthly, and the government forgives the debt after 25 years. Obama’s plan calls for payments of only 10 percent of the borrower’s total income and forgives the debt after 20 years.

The plan is estimated to cost between $1 billion and $2 billion over the next five years.

UI Director of Student Financial Aid Mark Warner said the plan would help a good number of students, but not everyone. Still, he said, he is happy with the proposal.

“This allows students to have more flexibility,” he said. “But it’s really intended to provide a little bit more relief for students who are challenged economically by the 15 percent rule.”

Under the Federal Direct Student Loan Program, which the UI has used for 15 years, borrowers can alter their payment plans monthly. Warner said most students pay off loans in around 10 years. It is to the student’s advantage to pay off student loans as quickly as possible to avoid paying more interest. But for those students struggling to pay 15 percent of their income to student debt, this plan would be a godsend.

“The idea behind it is to help the student at any given point in time when they may be economically challenged,” Warner said.

Obama’s proposition could set the tone for a reform in funding for public education across the county. And it should. Ideally, Congress would pass a bill that would make a college education more affordable across the board. But this proposal would be a good step.

Now in my fourth year at the UI, I have seen layoffs, program cuts, and tuition battles that have turned students against their government representatives.

While I accept that there is no simple — or even timely — solution to such a deep issue, Obama has made it clear that he is looking out for our generation’s prosperity. His determination to help us succeed concurrently lays upon us the responsibility of fighting through these financially straining times.

Obama’s speech should have instilled in students a hint of hope for the future. But in order it to succeed, we need Congress to share Obama’s passion for improving the education system right now.

Only then will we have the ability to help America grow.


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