OPINION
FEB. 24, 2014 | THE MERCURY | UTDMERCURY.COM
Interest payments on loans too burdensome for some students JOHN THOTTUNGAL COMMENTARY
No student in America should have to forgo higher education for the lack of financial resources. There are scholarships for students offered by universities, colleges and many for profit education institutions such as DeVry. But what about students who are not able to get the limited number of scholarships or those who don’t qualify because their parents make a little more money that precludes them from scholarships or even federal student financial aid programs? This leaves all the students who make the choice to take loans from public and private institutions. Financial Application for Federal Student Aid, or FAFSA, loans along with other federal government subsidized loan programs, such as the GI bill for veterans, all help students who want to attend or return to school. The question to ask in this underperforming and shaky economy, where the stock market jumps every time there is a slight decrease in the unemployment numbers, is whether the U.S government need to make this much money off the backs of students who are paying the economy back by getting jobs, earning more and spending more? $185 billion and $1.2 trillion are some of the numbers being thrown about when it comes to the topic of student aid and loans from Forbes and the New York Times. The joy of finding a job and getting your first paycheck is reduced when a chunk of it is doomed to go to the butchery of loan
payments. One’s total earning potential over the course of a career is diminished as interest payments on the total loan ensure the absence of equity that could have been put towards a mortgage or a down payment on a house. Over the next decade, student loans are projected to bring in $185 billion to the federal government, according to the Congressional Budget Office. The CBO estimates an average of 36 cents of profit for every dollar worth of loans taken by a student. When you take the amount of $185 billion and spread it over the next 10 years, it makes the student federal agency one of the 20 most profitable companies in the world according to Shahien Nasiripour of the Huffington Post. It is usurious to make this much money off the back of students who bring more money to the economy once they graduate and get jobs. A monthly payment of $300 can be used to pay down a mortgage or built up a retirement nest egg, reducing the burden on the economy and Medicare. Foreclosures and bankruptcies would be reduced if there would be more disposable income floating around. Even if one were to make the argument that people are more likely to spend the money and not save it, it still benefits the economy, especially one that is dependent on the retail and housing market. The NYT has written about how future generations of students will have to pay for the overhaul of the federal loan program, but this is not a solution, nor is it even a bandaid to stop the bleeding of money that leaves the pockets of students when they graduate. A more permanent solution that ensures that
every student in America should be able to study if they choose to is required. A lack of this solution will set up the American economy for another windfall as more students who are unable to keep up with payments will default, which will have a ripple effect. This is reminiscent of the housing market crash not too long ago. Once again, America is more alone in this situation amongst the countries of the G8, as it is with many other issues such as health care. Most colleges and universities in other countries offer degree programs that are free or almost free for its students. Other developed nations offer interest free loans, or loans that have a higher chance of being forgiven. Free higher education in America will not happen, and one should not even have any expectation of that. The best one can hope for in terms of a permanent solution, rather than just an overhaul, are interest-free loans as a best-case scenario. It is important to keep in mind that students here do have the option of applying for loan forgiveness, and there are programs that allow lower monthly payment or payment deferral for student loans. Interest-free loans may be one solution, but that would require a change in the answer to the fundamental question of garnering profits off the backs of students who choose to take loans. I am not sure that America is ready to answer that question, but this will be one of the central issues that face politicians in the next election. Until then, it is best to start looking for the first and second job after graduation, and one shouldn’t forget the possible advantages of paying a dollar each week for a lottery ticket of which some of the profits go back into the school system.
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Comets and Craters Editor’s Note: In an attempt to expand the scope of this opinion page, the editorial board created this column to higlight the significant high and low points of campus life, administrative decisions and news at UTD. If you think we missed something or have a suggestion, we encourage you to contact us. You can find the best ways to reach us in the information box at the bottom of this column.
Coffee from The Pub: There’s nothing like burnt coffee to wake you up in the morning. If The Pub’s version of Starbucks is going to charge Starbucks’ prices, then it should produce the same quality coffee. It’s the caffeine in a cup of joe that’s meant to give you a jolt, not the subtle taste of soot. Revitalization of the Plinth: There’s three main parts to any college student’s watering hole: a nearby source of food, plenty of seating and a steady stream of music. With all the music and daily events out on the Plinth recently, it seems poised to become the hangout spot it’s always wanted to be. Cecil Green blocked off: There’s a slew of inconveniences the north mall renovation is causing students but none as grave as denying them the chance to rub Cecil Green’s head. Don’t be surprised if the school’s collective GPA plummets. The parking garage glory days: After a rough start, the parking garage is finally coming into its own. There are spiffy colored lights to designate areas, changing levels during inclement weather and an accurate display of available parking spaces. Now, if people would stop knocking down the guide poles, it’d be perfect. The rise of the clickers: If you haven’t been required to purchase a TurningPoint response card for one of your classes yet, it’s likely that you soon will. These clickers are becoming more and more popular amongst professors; however, not all professors have seemed to hone in on the real value of this trending technology. Students are wasting their money for classes that only use the devices for quizzes and attendance, which could more affordably be done with classic pencil and paper. Where these tools really show their worth is in quick, interactive and anonymous feedback to engage students and get accurate responses for tough subjects.
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“Does it affect you when people smoke on campus?”
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LINA MOON | GRAPHICS EDITOR
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“Yes. I’m allergic to cigarette smoke, so I tend to go away when they are smoking.” Julia Pinto Mathematics junior
“I think it does. There are some people who are considerate and blow smoke out of the way, but some people just blow it and it ends up in the person’s face, behind them or next to them.” Christopher Lin Biology senior
“It doesn’t affect me as long as it’s outside. I really don’t know why it should bother anyone.” Haad Fazlani Accounting and finance senior
“Honestly, as long as there is a designated area for people to smoke and it’s not really conflicting pathways, I don’t see why they shouldn’t have the area to fulfill their addiction.” Omar Hamed
Molecular biology junior
“It does. I wish this place becomes a smoke-free zone or at least have some place where people can smoke.” Danny Matthew Sundaresan Business administration junior