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T.J. Newton | ||||||||||
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Us Slowly: The Cost of Higher Education T.J. Newton |
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The College Access and Opportunity Act of 2004 is upsetting to many people because it prevents students from locking in a low fixed rate when they pay back their student loans. But there are other problems with the legislation, including what may amount to ideological discrimination that disfavors economically disadvantaged students who need to borrow money to receive a college education by restricting their freedom. This bill targets poor and middle class students who need student loans by making loans more expensive, forcing students to take on additional debt, and preventing them from pursuing the kind of opportunities their wealthier counterparts are free to pursue. While student loans make education accessible to those who would otherwise be unable to afford it, access to the benefits of education are further reduced by this legislation. |
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Section 423 of the legislation appears to prevent students from locking in a low fixed interest rate when they pay back their loans. If this legislation is passed, loans would instead be tied to the bond equivalent rate of 91 day T-bills, with a cap of 8.25% interest and a minimum of 2.3% (2.3% assuming the T-bill rate is 0%!) |
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Students with variable rate loans have had a cap for some time, but in 2002 the cap was lowered from the 8.25% used in this legislation to only 6.8% (US PIRG). This legislation raises it back up, and then prevents students from getting rid of the capped variable rate and getting a locked-in low fixed rate. A low fixed rate is sometimes below the "minimum" of 2.3% set in this legislation, and at the present time, below the practical lowest rate this legislation provides. The bill also appears to place political and ideological restrictions on students and institutions, as well as placing requirements on professors and courses of study that may inhibit both the learning experience of the student and the instructional freedom of the professor. Section 103 may be making a good attempt at protecting the rights of students from certain types of intellectual discrimination in the academic setting. But this can be a difficult problem to solve, and the solution may require more or less legislation. Although Section 103 seems to protect students, its meaning and intention can be interpreted in various ways. For example, does it mean guest speakers at a university must be asked about their religious beliefs? Does it mean that students, faculty, and staff must divulge their political, ideological, and/or religious views to the university, faculty, and/or student loan provider? Couldn't this actually result in discrimination? It is always a good idea to protect students from discrimination in any form, including intellectual discrimination. Although Section 103 makes a good attempt, this doesn't seem to be the best way of solving the problem. A great deal of thought and discussion is likely to be necessary before the best solution is found. In another section of the legislation, Section 481, the bill may inhibit courses of individual study, or courses in which students are required to periodically conduct extensive research, field studies, or travel. It is hard to say what Section 481 does, if it does anything significant at all, because it is unclear what the authors of the legislation mean when they use terminology like the phrase "instructional time." |
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After raising interest rates on students and preventing them from locking in a low fixed rate, one must wonder whether the ideological restrictions that appear to protect students are in some way related to a kind of ideological discrimination that disfavors economically disadvantaged students who need to borrow money to receive a college education by restricting their freedom. For example, a large student loan debt can lead to unfair treatment in the workplace, because employers know the debt burden will prevent the employee from quitting as long as the debt lingers, particularly in a poor job market. To most people, the changes made to interest rates alone in this bill show the disgust among many wealthy, educated conservatives with the idea of the poor and middle class receiving the education sometimes needed to overcome unfair and oppressive treatment. Charging an extra $5500.00 only adds to the punishment. So it is a good idea to inquire into the meaning of the more ideological sections of the bill, such as Section 423, which deals with intellectual discrimination, and Section 481, which deals with instructional design theories. What the legislation doesn't require is as important as what it does require, especially when trying to decide whether or not the bill is helpful to students. Consider Section 425. While it does require lenders to disclose whether or not the borrower has the ability to prepay, change their schedule, or change their plan, it does not require disclosure of how an overpayment is applied. So students who pay a little more than their minimum payment one or more months might simply be paying more interest to their student loan provider, who can hide the information in various ways. |
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The bill also doesn't require lenders to report a student's positive payment history. |
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There is a lot that is in this legislation, and a lot that isn't in it. The bill hits students with higher interest rates to the tune of $5500.00 or more, doesn't help them pay it back in a way that's fair, and seems to promote intellectual and ideological discrimination as much as it seeks to protect students from such discrimination. The ideological motives of the bill's authors are unclear, but the bill does not appear to help the poor or middle class attend school and enjoy the benefits of education once they get out. High school graduates who need to borrow money to attend college are faced with the choice of no college or college and enormous debt. That doesn't seem like a choice at all. It seems like ideological discrimination that disfavors economically disadvantaged students by restricting their freedom, and it must be stopped. |
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