One of the most recent bills working its way through the House of Representatives will make or break students deciding whether they want to pursue higher education or not, but it is a step in the right direction.
While the bill, known as the “Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act,” will not directly affect how Northwest or other universities conduct their business, it will impact the way students pay back the loans they accumulate.
In short, the biggest concerns the near 600-page bill proposes includes much higher spending on the student’s part month-by-month.
Monthly income based repayment plans would be eliminated and the payback rate would increase from 10 to 15 percent.
The bill will also do away with other federal grants with the exception of the Pell Grant. Though, this blow would be lessened as other regulations will see 1.1 million more students earning the Pell Grant.
There are currently four types of income repayment plans, and the PROSPER Act will consolidate these repayment plans down to two.
Additionally, what seems to be the biggest blow to both college student wallets and self-esteem is the fact that loan forgiveness will no longer be offered after 20-25 years.
Any seniors reading right now are likely shaking in their shoes, but things are not all bad.
Overall, the method by which the government garners money from students was put into place during the financial crisis in 2009 as a way to make college more affordable for students. At the time, these massive federal cuts resulted in payment plans more in favor of the average college-bound student.
However, these cuts do not turn over a profit. The PROSPER Act is an attempt to balance student payment plan with the amount of money the government will be bringing in from taxpayers. These new reforms are estimated to collect an addition $40 billion per year, bringing education monetary intake up to $90 billion per year.
This increase in income is small compared to the more than $1 trillion in total unpaid loans, but there needs to be steps in place to dig out this debt. This is not an attempt to pickpocket students of their hard-earned money; it is simply an attempt to set a balance.
Since 2009, national loan debt has shot up $1 trillion. This is a drastic increase that will only continue to grow without logical revisions.
The current method was set in place during a time where the decision to go to college was riskier than ever. Stresses that come with making massive change are inherent, but add on top a failing economy and striving for higher education suddenly becomes nonsensical. There needed to be revisions that made college make more sense and it worked.
It may invoke a feeling of insecurity for those coming out of college, but the PROSPER Act is a needed reformation on outdated ideas.
Balance is needed. Though we may not like it, it is time we pitch in a bit more to aid the national college debt.