Spikes and Booms: The Higher Ed Week in Review

By Andrew Roush in Promote & Protect, Special on July 26, 2013 at 5:06 pm | No Comments

What’s the deal with student loan rates? And have people stopped going to college? Here’s a brief look at what happened this week in higher education.

President Obama’s speech on the economy at Knox College in Galesburg, Ill. Wednesday made headlines for its focus on jobs. It also caught the ears of higher education watchers across the country for a few choice phrases—notably that Obama intends to “shake up” higher education, a system many see as too expensive and slow to change.

Here’s what Inside Higher Ed’s Scott Jaschik had to say:

While President Obama has consistently talked about the importance of higher education, his rhetoric on responsibility for college costs, and on the need for significant change, has been mixed. On Wednesday, he was using phrases like “undisciplined system” and promising a plan to “shake up” the system.

Similar to the college scorecard he announced in his State of the Union address, this speech made clear the president’s focus on accessibility and affordability, watchwords that have also dominated the higher education discourse in Texas.

And politics may, indeed, make strange bedfellows. Gov. Rick Perry has focused on getting more Texans through college, and UT-Austin president Bill Powers has disagreed with the Perry-appointed Board of Regents on whether to raise tuition. The legislature, which deregulated tuition in 2003, has also appropriated less and less general revenue toward higher education over the past 20-30 years.

With the cost of college an ever-growing concern, a deal brokered this week to keep federal student loan rates from doubling also garnered national attention. On Wednesday, the Senate gave the go-ahead to a bipartisan deal to tie interest rates on federal loans to the 10-year government Treasury bill.

Elvina Nawaguna of Reuters reported that the deal didn’t sit well with some Democrats, who feared the floating rate could rise to unsustainable levels:

Some critics of the deal said it did not do enough to protect borrowers from paying exorbitant rates when market interest rates rise sharply.

Democratic Senator Barbara Boxer of California said that plan is worse than what would happen under the current law, because rates could go higher than today’s rate of 6.8 percent.

But lawmakers voted against any amendments such as one by Democratic Senators Jack Reed of Rhode Island and Elizabeth Warren of Massachusetts that sought to cap undergraduate rates at 6.8 percent for undergraduates and 7.9 for graduate and parent loans.

Other news this week may actually reduce the student loan burden in a surprising way. Gawker reports that the latest enrollment numbers across the country are going down.

Hamilton Nolan drew some broader conclusions from the news, and counters the rhetoric of policymakers like Obama and Perry:

College is great. Education is good. Making a college education available to everyone who needs and wants one is an admirable goal. But everyone does not need or want to go to college. There are plenty of other perfectly valid and fulfilling choices a person can make. The government’s policy of pushing ever-greater numbers of Americans into college as some sort of cure-all is similar to the government’s old policy of pushing ever-greater numbers of Americans into home ownership as some sort of cure-all. Those things are nice. But they’re not for everyone.

Photo by Marsha Miller courtesy UT-Austin.

Tags: Gov. Rick Perry, higher education, president barack obama, student debt, student loans, week in review