Don't add to student debts

December 16, 2005

Congress has been making some lists and will be checking them twice, and America's financially pressed college students could end up with the financial equivalent of coal for Christmas.

The lists are spending cuts that have been passed by the House and Senate and that include the largest-ever cuts in federal support for student loans. The double-checking will take place in the budget reconciliation process - in which there's still an opportunity for Congress to avoid making higher education even more unaffordable.

Who isn't aware by now that the cost of attending American four-year colleges has been soaring far beyond the rate of growth in U.S. family incomes, and that more and more students are having to take out loans to get by?

About half of all student aid now comes as loans, and students are leaving college with an average of more than $17,000 in debt to repay. In addition, about three-quarters of college students report relying on credit cards to pay for food, books and other school expenses. As a result, 39 percent of all college graduates leave school saddled with a level of loans and other debts considered unmanageable.

And now Congress is poised to help make that average debt total leap higher. Among the House's proposed spending cuts is $14.3 billion from federal student loan programs over the next five years. These cuts won't decrease the number of loans but would raise student borrowing costs by almost $9 billion - or an estimated $5,000 per student, according to the U.S. Student Association. The best hope for college students offered by Congress is not that much better: the Senate's competing proposal of $8.5 billion in student loan cuts through 2010.

House Republicans maintain that their cuts won't have as big an impact on college students as has been portrayed by student groups and other opponents. Some of the proposed cuts would come from raising interest rates and fees associated with student loans. Most would come from reductions in government subsidies to private lenders - savings that the Senate bill does plow back into loans for low-income students, but that the House bill retains and uses to partially offset its next round of tax breaks for the well-off.

The details may be up for debate, but there's no question that both the House and Senate proposals would add to the cost of college - just about the last thing that students and their parents need. Higher education represents a critical investment not only for them but also for the nation as a whole, so it's hard to see how these proposed cuts are in America's interest.

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