Student loan debt and the cost of college are out of control and climbing

Student loan debt and the cost of college are out of control and climbing
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The benefits of higher education are on the minds of nearly 2 million college-bound high school students graduating this spring.

To make matters worse, federal student loan rates will rise 13.5 percent this summer. The long-awaited and urgently needed reform of our nation’s higher education system will have to wait at least another year.

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Advancing reforms to help make higher education more affordable were touted as a leading priority for the 115th Congress and the 2016 Republican Party Platform. Yet, the House has yet to pass its Higher Education Act, (Prosper Act).

Just a few days ago Sen. Lamar AlexanderAndrew (Lamar) Lamar AlexanderGovernor's race grabs spotlight in Tennessee primaries A single courageous senator can derail the Trump administration GOP worries trade wars will last as Trump engages in temporary tiffs MORE (R-Tenn.), Chairman of the Senate’s Health, Education, Labor and Pensions Committee, told the New York Times education conference, “the Senate will not produce promised higher education legislation this year,” adding, “the Democrats won’t do it, they want to wait until next year to see if they’re in better shape politically.” Sadly, these two events are not among the many gifts Republicans were expecting to receive after the Obama administration’s “graduation.”

Federal student loan debt and the cost of college education are out of control and climbing at an unsustainable trajectory.

The primary reason for this is three-fold: unfettered access to federal student loans; a plethora of overly-generous loan forgiveness and multiple repayment plans which encourages over-borrowing and frees schools from the responsibility to charge prices that actually match the market value of the degrees they offer; and the fact that nearly half of undergraduates take at least six years to earn their degrees.

To underscore the meaning of this third cause, four years ago the average cost of just one additional year at a four-year public university was nearly $64,000 in tuition, fees, books, living expenses and lost wages.

The guardians of U.S. higher education complex will give you a litany of other reasons why college costs have increased, but as research fellow at the Family Policy Institute of Washington, Blaine Conzatti, summed it up two years ago, “Millions of students have become burdened with previously unimaginable levels of student loan debt needed to finance schooling that has been made artificially expensive by government intervention.”

Almost without exception, market costs rise whenever there is an artificial stimulus that acts to increase demand. Moreover, this phenomenon has been especially evident in the interaction between increased student loan availability and overall college enrollment and price inflation since 2010.

Progressive democratic thinking about tuition-free schools has increased access to federal student loans. Moreover, and overly generous debt forgiveness has led to unrealistic expectations on the part of millions of students which:

(1) helps explain current loan delinquency rates which are now nearly as high as they were on subprime mortgages during the housing crisis

(2) discourages personal responsibility

(3) contributes to rising college cost

Removing a sizable portion of a student’s financial responsibility to repay his/her federal student loans encourages students to borrow regardless of whether or not doing so is a smart financial decision. While federal student loans can help facilitate college access, they should not guarantee access to any institution at any price.

After several years of congressional hearings on higher education reform to explore opportunities for promoting innovation, access and completion; simplifying and improving student aid; reducing college costs and improving college affordability; empowering students and families to make informed decisions; and ensuring strong accountability and a limited federal role, the inability of the 115th Congress to produce and pass a bipartisan higher education reauthorization bill for the president is a national disgrace.

As sad as it is, it appears the only way a major overhaul of our outdated, costly and Byzantine system of higher education will occur is if the Republicans pick up more seats in the Senate.

Despite the pronouncements of political pundits, this may not be that difficult. Of the 35 senate seats on the ballot this Nov. 26 are held by senators who caucus with the Democrats, and only nine are held by Republicans.

Democrats will work very hard to protect their incumbents in the 10 states which Trump won in the 2016 Presidential Election. But this will not be easy considering Republicans have done pretty well in addressing the top four policy issues on the minds of voting Americans come this November, which are the economy, security, health care, and seniors issues according to a recent major poll by Morning Consult.

The real question is what will Republicans do to address education, the fifth top policy issue on the minds of voters this November? The good news is that House Republicans met last week to discuss the Prosper Act.

House passage of the Prosper Act will help Republican candidates defend the Act’s many worthy provisions when higher education reform emerges as front and center during coming debates.

Passage of the Act would be a fine addition to the long list of significant Republican accomplishments over the last year and a half. It also signals that Republicans tried really hard to pass the type of education reform that will promote our economic competitiveness and prosperity.

Unfortunately, having to wait another year or two for a major overhaul of the higher education is another example of how some Members of the 115th Congress refuse to work as responsibly as they should for the people who elected them. The inability of Congress to staunch the unacceptably high cost of education in a bipartisan manner has been a national disgrace.

Though not perfect, the Prosper Act is a very responsible step forward. Republican victories in November may very well depend on an astute and well-reasoned defense of the urgent need to streamline the student loan program, cap loan limits, cut unnecessary regulation and increase grants for undergraduates who truly need them. Students, parents and taxpayers deserve a higher education system that works for them.

Will the next Congress succeed? I believe they will.

Ronald Bearse is a former education financing company executive and studied education as an element of national power at the National Defense University.