Success for those fighting student debt! As of this past week, Congress officially prevented the interest rate on subsidized Stafford loans from doubling. The move will affect approximately 7.4 million students, saving them an average of $1,000 over the course of their loans, according to White House estimates. Though subsidized Stafford rates are scheduled to go back up as of July 2013, the provision is undoubtedly a temporary victory for students struggling with college debt.
But the battle for college affordability is far from over.
Tuition is still rising at an average of 8 percent each year according to Finaid.org, though many individual institutions have approved substantially higher tuition hikes for the 2012-2013 school year. But there's hope on the horizon. A flurry of bills designed to increase college affordability, especially among low-income students, may provide some relief. Here's what could be next in college finance reform.
- Greater transparency. Last month, the White House outlined several concrete steps colleges and universities can take to make their financial aid process more transparent. These include publishing the total cost of attendance for one year, providing estimated monthly payments for students taking out loans and offering enrollment, graduation and loan default rates. Some of the major education players have committed to the endeavor, including the State University System of New York, a network of 64 two and four-year institutions. The catch is that the schools with embarrassingly high loan default rates and abysmally low graduation rates aren't on that commitment list.
Controlling college costs. All the student loan interest capping in the world won't amount to bupkis as tuition prices continue to spiral. This past January, POTUS introduced a plan that would tie certain types of federal funding to an institution's efforts to keep costs under control. The plan was supposed to be a much-needed first step in holding colleges responsible for what they charge; however, by and large, it's been dead in the water. We're hoping that with subsidized Stafford loan rates in check (for now), the topic of what colleges can do to keep costs in check will hit the headlines once again.
Aid for undocumented students. Immigration issues are heating up and college finance reform won't be left out of that debate. This past April, the Colorado Senate passed a bill that would provide tuition discounts for undocumented students. To qualify, students must present an affidavit stating that they have or will apply for legal status as soon as they are eligible. Several other states have similar laws or bills under consideration.
Whether any of the new provisions will actually provide relief to students who need it most is yet to be seen. One thing is for sure -- we're in for some intense debates. What do you think about these steps for college reform?