Senator discusses student debt

by: Camille Wick – Staff Writer – [email protected]
A North Carolina Senator and member of the Education Committee spoke last Wednesday about the importance of college affordability and her plans to change current legislation that places higher education out of reach for many Americans.
“Today, our Americans have more student loan debt than credit card debt,” said Sen. Kay Hagan. “Lack of affordability really stands as the major barrier to college access to so many people.”
The average graduate in North Carolina owes about $21,000, Hagan said.
“College is not the end-all anymore,” UNC Asheville graduate Leah Shapiro said. “College does not necessarily mean you’re going to get a job right away, so it shouldn’t set you back for the rest of your life.”
A worker with a Bachelor’s degree earns 85 percent more, on average, than an individual with just a high school degree, Hagan said.
Jose Cruz, vice president for Higher Education Policy and Practice at The Education Trust, also spoke during the conference call.
“Making college more affordable is also important from the standpoint of ensuring that America will be able to fulfill its promises of opportunity and social mobility for those who work hard and play by the rules,” Cruz said.
Hagan increased opportunities for students to participate in the Federal Work-Study Program while in the office.
“This means that students, while they’re borrowing money to go to school, can actually work, so they don’t have to borrow more money and increase their student debt,” Hagan said.
Hagan remains involved with other programs aiming to make college more affordable.
“We’ve also created the American Opportunity Tax Credit, and this has given millions of families in our country up to $2,500 per year per student to help their children pay for school,” Hagan said.
Hagan discussed the importance of education in relation to the economy.
“Making college affordable is key to keeping America competitive in a global economy,” Hagan said. “These (students) are the workers that our businesses need and our entrepreneurs need to grow and prosper.”
Hagan said she plans to make structural changes in governmental policies regarding federal revenue and higher education institutions.
“As we look at this economy and we look at our long-term debt and our deficit, I think we’ve got to realize that we’re going to have to make some pretty big changes in our budget,” Hagan said.
The Protecting Financial Aid for Students and Taxpayers Act, sponsored by Hagan, is a bill to amend the Higher Education Opportunity Act.
“Some of our universities right now are for-profit entities,” Hagan said. “They spend considerable amounts of money on marketing, recruiting and advertising, and they also get 90 percent of their funding, at least, from the federal government, from taxpayer dollars.”
Hagan’s bill attempts to restrict higher education institutions from using federal revenue for advertising, marketing and recruiting.
“From these taxpayer dollars, 40 percent of it might be going to advertisements instead of educating the students,” Hagan said.
College may still be out of reach for some Americans, despite Hagan’s Protecting Financial Aid for Students and Taxpayers Act.
“It’s really shocking to know that today, when you look at low-income students, they are required to contribute the equivalent of 72 percent of their annual household income in order to be able to afford one year’s worth of college,” Cruz said.
About $2 billion of the state budget is put toward universities each year. However, the state aid is decreasing, and the burden of college costs is placed on the students with increased tuition and fees, Hagan said.
Students must borrow more money in order to counter the decreased state aid, which increases their debt.
“It is also particularly scary that we are soon going to get to a point where the youngest generation of Americans will be less educated than their parents,” Cruz said.