WASHINGTON—As education leaders across the nation are calling on Congress to act before July 1 to prevent student loan interest rates from doubling, a new report released today by the American Federation of Teachers warns that the combination of massive student debt and public disinvestment in higher education threatens Americans' ability to gain access to and successfully complete college.
The report—"On the Backs of Students and Families: Disinvestment in Higher Education and the Student Loan Debt Crisis"—outlines a series of policy recommendations aimed at advancing goals that "must be achieved if our nation is to have a prosperous economy, a healthy democracy and a just society."
Those goals include:
- Relieving the student debt burden for current borrowers;
- Promoting debt-free higher education;
- Enhancing state funding for public higher education;
- Prioritizing academic needs in college and university budgets; and
- Eliminating the fraud and abuse that entrap borrowers in debt.
"For a growing number of students, loans have become the primary or only means of paying for college," said AFT President Randi Weingarten. "For many people, this slams the door on their hope of pursuing a college education. And with interest rates on many federal student loans scheduled to double on July 1, things could get even worse."
It will take quick action to avoid that, Weingarten said. "Congress must act swiftly to avert a doubling of interest rates this summer, but it must take care that any fix does not end up costing students more in the long term," she said. "Given the quickly approaching deadline, Congress should pass a short-term extension of current interest rates on subsidized Stafford loans. Then lawmakers must take the time to more thoroughly address all federal financial aid programs—including student loans for new and existing borrowers—in the context of reauthorization of the Higher Education Act."
With higher education now seen as more important than ever to maintaining America's global competitiveness, Weingarten said much more is at stake than just who is able to enroll in college.
"Access to affordable, high-quality higher education is critical to enabling opportunity and ensuring our young people can compete in today's changing economy," she said. "If they are shut out of college or saddled with crushing debt, it hurts their chances of having a well-paying job and cuts short their dreams of starting a family, buying a home or achieving economic security."
Weingarten, who is in Las Vegas to address the League of United Latin American Citizens town hall meeting on immigration reform, is scheduled to participate in a media call today to discuss the interest rate crisis and other college affordability issues. Others planning to be on the call are Rep. Karen Bass (D-Calif.); Rohit Chopra, student loan ombudsman with the Consumer Financial Protection Bureau; and Tiffany Dena Loftin, president of the United States Student Association.
"While we celebrate the growing number of students attending college, we must support them," Weingarten said. "As enrollments have soared, government investment in higher education has plummeted. Over the past decade, students and their families have confronted annual increases in costs at public colleges and universities that have outpaced inflation, while there has been a steady decline in need-based financial aid."
The report released today by the AFT notes that state appropriations per full-time equivalent student enrollment stood at a 25-year inflation-adjusted low in 2010 and declined further in 2011. "This lack of support for higher education makes it more and more difficult for middle-class students—and especially low-income and disadvantaged students—to afford college," Weingarten said.
The effects of this withdrawal of public resources from public higher education go beyond student debt, the report says. Disinvestment by states in their public colleges and universities means:
- Fewer resources to help increase student access to and completion of college studies;
- Particularly tough financial challenges for community colleges, which are the most under-resourced institutions yet serve more low-income students;
- Radical changes in the academic workforce, as colleges increasingly rely on contingent and adjunct faculty—who now make up more than 70 percent of the instructional corps; and
- Increased reach of the often exploitative practices of for-profit education providers, which are receiving a growing percentage of federal financial aid dollars.
"The AFT believes that continued disinvestment in public higher education is having disastrous consequences for our nation," the report concludes, "and that these consequences will be particularly disastrous for low-income students and people of color."
Weingarten emphasized the urgency of addressing these problems. "We must work together to develop solutions that promote increased public investment in higher education," she said. "If we are to ensure financial and social prosperity for all Americans in the 21st-century economy, we will have to temper the skyrocketing cost of college."