Of the 20 million students who attend America’s institutions of higher education each year, about 12 million–60%–borrow money to cover the cost..
Why are students essentially forced to incur this expense? The answer is quite simple. The cost of higher education in this country keeps escalating. The Department of Education (DOE) has a nifty calculator that generates lists of the least and most costly institutions. According the DOE’s calculations, Connecticut College wins the exorbitant cost contest, coming in at $43,990. Across the nation, students are being saddled with college expenses that create an average of $26,000 in student loans. So, how do we address this problem to lessen the blow?
Yesterday, Massachusetts Democrat Sen. Elizabeth Warren proposed a bill that would curtail excessive student loan costs by reducing interest rates to match what the federal reserve offers big banks. It turns out banks pay 0.75% and come July, students will have to pay a rate of 6.8%. Why should banks get a lower interest rate than our nation’s students?
All In with Chris Hayes spent Thursday on a college loan blitz. Sen. Warren discussed the investment our government makes in banks instead of in its students. Then Ryan Grim and Shahien Nasiripour of Huffington Post talked about their shocking report on how higher institutions and private lenders bond together in a convenient marriage: Sallie Mae collects student debt, while colleges make money investing in Sallie Mae. The report raises serious questions about conflict of interest.