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Monday, February 14, 2011

Obtaining higher education to find a job will be more expensive, if Pres. Obama budget is enacted

the 44th President of the United States...Bara...Image by jmtimages via Flickr
President Obama wants to end
Graduate level education interest
loan deferment, causing students
to pay on their debt, while in college. 
Pursuing a higher education has been one of the American dreams or staples of life instilled by many middle-class parents across America, as a ticket to comfortable career and decent retirement. But, if President Barack Obama (D) has his way, it could become more expensive for middle and lower class Americans to obtain University degrees to work their way into the jobs of the future.



At least one component to be announced with the February 14th Federal Budget for 2012, would pile more debt upon graduate students, potentially making the dream of Master’s or Doctorate level education more unattainable for many Americans. For the Obama administration part, officials say the move is needed to ensure that a popular financial aid award stays available at current levels.

Specifically,  In an February 13th interview on CNN's "State of the Union", Obama administration Office of Management and Budget Director Jacob Lew said that interest on graduate school loans will begin building up while students are still in school, completing their studies. Currently, interest does not begin compiling until after students graduate or, are out of school for more than a six month continual period.

Rightfully, CNN’s anchor Candy Crowley questioned Commissioner Lew about if this proposal to the budget would make graduate school less accessible for many Americans:

CROWLEY: Here's the problem, I guess. If you are a graduate -- let's take one of your examples. You're a graduate student; you are, right now, getting loans. You don't have to pay those loans or any interest on them until you graduate. But now you have to pay -- or it accumulates, I'm assuming -- you have to pay interest beginning on day one of grad school, and that makes it so that you can't go to grad school.

LEW: Well, let's just be clear. Interest will build up, but students won't have to pay until they graduate. So it will increase the burden for paying back the loans, but it will not reduce access to education. That's, I think, part of how you can responsibly have a plan that deals with the challenge of solving our fiscal crisis, getting out of the situation where the deficit is growing and growing, but also investing in the future.





But, Obama Administration Official Lew assurances students still will not have to start paying back their debt until after they graduate; would not offer encouraging words to graduates who emerge from upper level Master’s and/or Doctorate’s education averaging, more than $40,000 in debt, according to FinAid.org. Students pursuing a medical degree can face more than $100,000 in debt.

In a change of attitude or thought process since last year’s State of the Union speech, President Obama with this budget proposal, must believe that students should take on high educational debt ratio’s to receive a similar degree as him. In January 2010, Obama stated, "In the 21st century, the best anti-poverty program around is a world-class education. No one should go broke because they chose to go to college." Mighty interesting what a difference a year can make.

Reducing loan subsidies for graduate students would save the government $2 billion next year and $29 billion over 10 years, according to an Obama Administration official.  Cost ‘savings’ from adding debt to graduate student education The savings will go toward keeping the maximum Pell Grant for undergraduate students’ award at $5,500, which was ironically increased from $4000, by President Obama with the American Reinvestment and Recovery Act of 2009.

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