So we all bicker about every dollar spent on Pell, but a $21.8 billion shortfall for the student loan program goes unnoticed? It goes unnoticed because this adjustment doesn’t need an approval from Congress; it is just noted in the budget (and in a rather confusing manner, if I may add). Just yesterday I went over the budget and I told myself: ‘I need to double check these numbers, it cannot be right’. But, they were… and Michael Grunwald’s article on Politico Magazine explains it all. However, the tables are so confusing that people are tweeting about the possibility that there is another nine billion adjustment that should be added on top of the $21.8 billion. See below:
It turns out the $21.8 billion is the total adjustment after all, but as Doug Criscitello rightly wrote: this only illustrated the need for more transparency.
Also missing is accountability. Of course we all know that Obama is offering and expanding generous repayment plans and forgiveness clauses to ease the financial burden felt by so many families. This might be necessary, but also short-sighted. We need to discuss the long-term cost of the student loan program. And I am not only talking in terms of tax-payers dollars. I am referring to the perpetuation of a borrowing culture, where we tell our young minds that it is ok to borrow. Nobody seems to want to discuss the long-term implications. Colleges like it: they can increase tuition and students will easily borrow a couple extra thousands. Politicians like it: they don’t have to ask for more appropriations to fund the grants. Tax-payers may not like it, but as the above paragraph shows, it is very confusing and difficult to follow… For instance, did I mention that even after this adjustment the student loan program is still profitable (well actually, it might not be, this is another confusing and contentious issue – there is two accounting methods yielding to different results). But again, the more complicated and less transparent, the better…
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