Jackman

What to learn from President Bush’s student aid cuts?

Brad Jackman JAC01016@BYUI.EDU scroll staff

The economic effects of Katrina and Iraq are hitting college students in the wallet, and this time even BYU-Idaho students won’t be safe. 

The national budget is tightening, and the government is looking for ways to cut spending. Students usually find themselves exempt from most tax increases or program cuts simply because students are already making little or no money. The government has now found the perfect way to get students’ money: raise student loan interest rates. Few students, even at BYU-I, will be able to escape the effects.

Three-quarters of students attending private colleges graduate with debt, according to a press release from the Center for Economic and Policy Research. The average debt of a private college graduate is more than $22,000 and rising each year. When debt is this high, even minor change in student loan interest rates and policies make a big difference. 

Bills in the House and the Senate are proposing an increase to student loan interest rates.  The current rate stands at 4.7 percent and proposals include raising it to 6.8 percent or allowing a variable interest rate with a cap of 8.25 percent.

Early payback incentive programs and other money-saving policies are also under the knife in Washington as legislators try to pull back spending. Average cost to students — almost $6,000 in additional payback fees. Savings to the national government — about $15 billion, according to the Congressional Budget Office. 

Where will the savings go? Congress has more holes in the budget than they have dollars, but proposals for the money include tax cuts, Hurricane Katrina relief, deficit reduction and even alternate student aid packages. 

Republicans are taking heat for this partisan plan to reduce student aid, but the Bush presidency has actually brought a dramatic increase in student aid funds. In the past five years student aid spending has increased from about $50 billion to about $90 billion. Even amidst the current pullback, President Bush offered to increase the maximum Pell Grant by $100, but Congress shot down the proposal. 

Federal spending has increased in recent years due to many factors, including the war in Iraq and Afghanistan. Compounded by Hurricane Katrina, the budget is only getting tighter. Every dime that goes to pay for roads, bullets, reconstruction or student aid first comes from a taxpayer’s pocket. Cutting back the budget is necessary at times, but budget cuts for education have long-term impacts on the nation and on student finances.

The average price of a college education has increased by about $3,095 in the past four years alone. While the percentage of students needing federal aid through grants and loans is high for all income levels, those who will take the brunt of proposed cuts will be middle to lower middle class students. These students are often less eligible for grant money and rely more on student loans. 

Instead of cutting back on education, the government could cut back on the $20 billion in federal pork barreling, eliminate and consolidate outdated or ineffective agencies, turn programs over to state agencies or the private sector, or find and eliminate wasteful spending. Education provides the country with the power to function at its highest capacity, and cutting education will only hurt the nation and the economy further.

Thankfully BYU-I keeps its tuition quite low, but students must be aware that world affairs and economic issues cannot stay out of Idaho forever. Students will likely feel the effects as they begin to repay loans, and should start tightening their own budgets to reduce debt.

Students and politicians must learn financial responsibility before personal and national debt gets out of control.