Tag Archives: Federal Aid

Who Is to Blame for Student Debt?

3 Jun

Readers of Young Workers Movement likely already know the answer to that question: the rising cost of higher education, combined with a labor market that values that high-priced education possibly regardless of quality.

However, Ron Lieber in a New York Times’ column last week placed the blame with students for failing to properly consider the cost of college when enrolling and their colleges for failing to counsel them.  His argument is that smart students and their parents should better assess what taking out substantial student loans will mean to their future financial situation.  Fair enough.  $100,000 in student loan debt – which is nearly impossible to default on in bankruptcy court – should set-off some alarm bells.  But that’s your #1, top-pick choice of school, that is both academically stimulating and socially engaging, money seems not to matter.  Besides, society tells you to go to the best college you can get into, and, as a general trend, the higher ranked schools cost more.

Lieber also argues college admissions counselors should talk with students about their ability to afford the school, which might bring them back to reality.  There is a reason college admissions counselors do not look at financial statements – having nothing to do with the awkward inappropriateness of that conversation, which Lieber dismisses.  Admissions departments do not have financial information because it could then potentially be used in determining enrollment.  How could schools then be prevented from only choose the rich kids so as to avoid enrolling anyone that would need financial aid?  There are already too many challenges facing low-income students, having to convince admissions counselors that spending a few financial aid dollars on them is a good investment, shouldn’t be a part of the equation.

So what do we need to do?  We need to change the system.  The federal government’s transformation of the student financial loan system is a great first step, as it will increase the value of federal aid and stop paying big banks what the government could do itself.  The financial reform bill in conference right now is also a great step, as it will put some oversight over the big banks dolling out private loans.

The answer is taking the cost out of college.  Imagine a system of higher education where money does not determine if or where you enroll, does not drive the quality of the education nor does it harm your ability to be a self-sustainable, financially-sound young worker when you graduate.  Rather than continue to subsidize the cost of college through grants and loans, the federal government should look to subsidize the cost of college by giving those grants to the colleges directly.  Invest directly in the schools, not the students.  The status quo allows for the cost spiral to continue escalating upwards without breakers.  The closest thing we have in the US to this system is the public college system of state and community facilities of higher education, but it is under attack by budget cuts.  Change of this magnitude will be difficult to come because of the degree of corporatization of higher education, but in the meantime blaming the students won’t help.  Blame the system they are caught up in.

Jobs Bill Scaled Back, Chances Unsure

27 May

Despite the overwhelming need for a robust jobs bill that will fund summer youth employment programs, spur investment in good green jobs, bolster state and municipal governments, and extend unemployment insurance, scared Democrats and “just say no” Republicans are putting the bill in jeopardy.  The American Jobs and Closing Tax Loopholes Act (HR 4213) is being compromised, and according to the Washington Post, will come for a vote in the House on Thursday but its chances in the Senate are not great.  The compromises will only extend unemployment benefits to November, rather than December, and will end the “doctors fix” – increasing Medicare’s payment to doctors by 20% – in 2012, rather than 2014.  In the grand scheme, these are two good things to cut because they (a) give Congress time to pass later spending bills and (b) are items that will have better chances of passing compared to other items in the next, likely more conservative, Congress.

With recovery act spending fading out, the economy needs another boost.  The Congressional Budget Office reports that the original stimulus act worked better than expected – creating 1.3 to 2.8 million jobs through the first quarter of this year, with additional jobs to come through middle of this year – federal government spending really does work.  In fact, its the best way for us to dig ourselves out of this recession.

This bill still needs to pass!  Below see the AFL-CIO’s post on the importance of the legislation.  Pick up the phone now and call 877-442-6801 to remind your member of Congress that young workers need this bill.

Jobs Bill = 1 Million Jobs. Tell Congress, Pass It Now!

Posted By Mike Hall On May 26, 2010 @ 11:42 am In Economy, Legislation & Politics | No Comments

While the U.S. House is still hammering out a timetable for a vote on the Promoting American Jobs, Closing Tax Loopholes and Preventing Outsourcing Act of 2010 (H.R. 4213), lawmakers might move a little faster if they take a look at [1] the latest report on the jobs bill. There are 1 million jobs at stake.

Call 877-442-6801 and tell Congress to pass it now!

The Economic Policy Institute ([2] EPI) estimates that the bill’s package of aid to states, infrastructure projects, extension of unemployment insurance (UI) and COBRA benefits, creation of summer jobs, loan guarantees for small business and other provisions

will help save or create well over a million critically needed jobs.

(more…)

EPI Report: Class of 2010

24 May

Will young workers entering the labor market now be worse off than their parents?  Should students forgo college due to overwhelming student loans?  These are the sad questions that many news outlets and research institutions have been exploring over the last few weeks as graduation season is in high-gear.  The Economic Policy Institute recently released a briefing paper calling for more federal aid to deal with this huge looming problem.  The paper’s main findings:

• The class of 2010 will be entering a labor market with the highest rates of unemployment in at least a generation; unemployment rates for both college graduates and non-graduates younger than 25 are nearly double their pre-recession levels.
• Since the start of the recession, the youth labor force (workers age 16 to 24) has contracted by 1.1 million workers.
• Since the start of the recession, an additional 1.2 million 16-24-year-olds have become disconnected from both formal schooling and work.
• Most young adults that come across hard economic times will fall through the large gaps in the public safety net.
• Contrary to arguments that higher federal budget defi cits burden future generations, rising public debt that finances efforts to boost economic recovery will minimize the deep economic scarring caused by the recession and increase future earnings for young workers.

Fund Education, Fund Jobs, Fund the Future

20 May

With the federal stimulus money running out and state budgets in significant deficits, states have had to significantly cut back their aid to local boards of education. This has resulted in higher property taxes, layoffs of teachers and other school employees, and diminished the quality of the education.  Congress needs to act swiftly to pass the “Keep Our Educators Working Act” introduced by Senator Tom Harkin (D-IA) which would create a $23 billion fund for local boards of education to keep school employees without having to raise taxes.

New Jersey voters, angry about their property tax increases after Governor Chris Christie (R) drastically cut school aid, rejected 58% of proposed school budgets – resulting in significant job losses, after-school program cuts, and school closings.  On Tuesday, New York voters were more generous, accepting 92% of school budgets – down from the record high last year of 97% when federal aid boosted budgets without raising taxes.

Adding a new dimension to the crisis, The New York Times reports today about the devastating job market for young teachers.  School superintendents are being flooded with over-qualified applicants for too few positions – for the first time in many places.  But rather than be able to benefit by bringing in the best of the best, many schools are suffering because they need to layoff teachers.  Additionally, many of these optimistic young workers are not able to get the experience they need to start off and are stuck on forms of unemployment insurance while their student loan debt mounts.

The Harkin bill won’t just save schools and those currently employed, but it will help deal with the growing crisis facing young workers.  Congress must act – its only legislative body that can address this crisis.

Follow

Get every new post delivered to your Inbox.

Join 34 other followers