Federal student loan borrowers can now apply for forgiveness of up to $20,000. The Biden administration recently launched a website in response to an announcement in August promising to cancel some student loan debt.
President Joe Biden said that individuals who make less than $125,000 a year could qualify for the cancellation of loan debt of up to $10,000 or as much as $20,000 for eligible borrowers who were Pell Grant recipients.
While this provides some relief for borrowers, we need a long-term solution.
It’s time Congress and higher education institutions take action by doubling the Pell Grant and providing affordable options for students.
Student loan debt — hitting $1.75 trillion — is now the second-highest consumer debt category, right behind mortgage debt. Nearly 70% of college students take out education loans and in larger volumes today than in previous years.
In the past 20 years, the average price for tuition and fees at public universities has increased 211% for in-state students and 171% for out-of-state students. Meanwhile, in the same time frame, the Pell Grant awards have only grown 29%.
It’s not just tuition that’s soaring. Interest rates for loan borrowers continue to climb.
The Federal Reserve increased interest rates to control inflation, and student loans bore the brunt of the increase starting July 1. All federal loans (undergraduate, graduate, Parent PLUS and Grad PLUS) increased by 1.26%.
An increase to the Federal Pell Grant could help alleviate the financial burden many students feel and even the playing field for low-income and first-generation students. Nearly 7 million students depend on Pell Grants annually.
In the 1970s, the Pell Grant covered more than 75% of the cost of a four-year degree at a public institution. Today, the maximum award ($6,495) covers only 26%.
The responsibility for attainable education shouldn’t only lie in the hands of Congress. Higher education institutions can make a difference by providing more affordable options and by doing a better job of informing students of financial aid opportunities.
One simple solution is to encourage students to complete the Free Application for Federal Student Aid (FAFSA). In 2021, only 56.7% of high school graduates completed FAFSA — leaving $3.75 billion on the table.
A survey by Student Loan Hero found that 85% of students didn’t know that completing the FAFSA opens the door to free gift aid (such as grants), depending on income level.
In the same survey, 84% of students contacted their school’s financial aid office for help, yet 59% experienced issues getting in touch with a representative at the office.
This shows that colleges need to do better in streamlining processes and informing students of what financial aid is available to them. If students aren’t aware of offerings such as grants and scholarships, they may be taking out more loans than they need.
In addition to financial aid education, colleges need to offer students more affordable options.
At Southeastern University (where I serve as president), we’ve been very intentional in tackling the issues of affordability and accessibility through our partner site model. Due to this, we have experienced exponential growth, receiving recognition by The Chronicle of Higher Education as the fourth-fastest growing master’s level university in the U.S.
Our education model is not just restricted to our Lakeland, Fla., campus. We are currently providing education at over 200 partner sites in 40 states across the country.
Students in these programs are able to earn degrees from an accredited institution at one-fourth of the cost and take classes at their own pace. Of our total enrollment, 17% of our students are first-generation students and 43% of our students receive federal grants.
We need to do everything we can to ensure students are given equal opportunities to pursue higher education. The reality is the highest-paying jobs in our nation require a minimum of a bachelor’s degree.
The surge in tuition rates and student loan debt demonstrates how higher education needs reform. Colleges and universities must be creative and innovative in how they deliver education, and they should be taking the lead in driving costs down for students.
Although universities can play their part in offering alternative options at a lower cost, Congress must also create solutions.
When signing the Higher Education Act in 1965, President Lyndon B. Johnson said, “for the individual, education is the path to achievement and fulfillment; for the Nation, it is a path to a society that is not only free but civilized; and for the world, it is the path to peace — for it is education that places reason over force.”
Education not only benefits the individual, but it propels our nation forward through innovation, competitive marketplaces and economic growth.
Dr. Kent Ingle serves as the president of Southeastern University in Lakeland, Florida, one of the fastest growing private universities in the nation. A champion of innovative educational design, Ingle is the author of "Framework Leadership.'' Read Kent Ingle's Reports — More Here.
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