Now that the Democrats have won control of both the House and Senate, many expect them to advocate for more funding for financial aid for higher education. Specifically, the Dems are expected to re-authorize the Higher Education Act, which distributes funds to low- and middle-income families, and authorize a a tax break for the parents of college students.
The real problem with financial aid is the astronomically high interest rates. Stafford loans given for the first time after July 1 of this year have a fixed interest rate of 6.8 percent. In comparison, the current interest rate on a 30-year fixed rate mortgage is 5.78 percent.
Many students simply aren't aware of the crushing costs of their student loans and don't realize that it will take many years after graduation to pay them off. As much as all college students would like to think so, most of them are not going to be millionaires by age 30.
The enormous cost of undergraduate education scares many students away from continuing their education. Although continuing education does allow students to defer on their undergrad loans while they're still in school, the deferral is only delaying the inevitable - and adding to the amount.
Not only does the cost limit the overall pool, it further disadvantages poor and minority students; the only students who can afford to stay in school are those whose parents can afford to pay the steep tuition without help from the federal government.
The government would benefit not only from increasing the overall number of citizens with advanced degrees but specifically the number of previously disadvantaged citizens with degrees.
Hopefully the Democrats will realize that it is the duty of the government to solve this problem and follow through with their campaign promises.
