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Congress flunking college affordability
Senate Finance Committee Chairman Max Baucus claimed the extension would "make a high quality education affordable for millions of students across the country."
This is significant since dozens of mid level and senior level administrative positions command six figure salaries, compared to the relative handful of faculty positions in that range.
Some 6 million to 7 million out of approximately 19.7 million college students would have been affected.
Federal subsidies have encouraged this situation. The reason is simple: Colleges are eligible to receive federal funds regardless of their productivity.
If Congress had failed to freeze the rate Omega Seamaster James Bond Price at 3.4 percent, none of the existing loans would have been affected. Instead, it would have meant only that future loans those taken out after July 1 of this year would have closed at 6.8 percent, the rate that existed in 2007.
Much of the increase in college costs has been due to administrative bloat, overbuilding, the proliferation of special interest centers on campus and light faculty teaching loads.
In reality, extending the 3.4 percent interest rate for an Omega Seamaster 1960
One recent analysis by Jay Greene, a professor of education reform at the University of Arkansas, found that the number of college and university administrators had increased more than twice as much as the number of instructors over a 15 year period.
Legislators should demand that taxpayer subsidized institutions provide accurate infor mation, including details about their Omega Women's Watches Leather
additional year will save students with federal loans approximately $7 to $10 per month: enough for a couple of burgers with fries. But it will cost taxpayers $6 billion and do virtually nothing to make college more affordable.
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federal aid has not made college more affordable. There is ample evidence, in fact, that federal "aid" has helped drive up college costs and extending the lower interest rate just kicks the can down the road.
The College Cost Reduction and Access Act of 2007 implemented a five year, incremental reduction in federal student loan rates, with interest rates ranging from 6.8 percent during the 2007 08 academic year to 6.0 percent in 2008 09, 5.6 percent in 2009 10, 4.5 percent in 2010 11, and 3.4 percent in 2011 12.
In late June, Congress froze the interest rate on federally subsidized student loans at 3.4 percent for another year.
College tuition has been increasing at about twice the general inflation rate for decades. The American Institute for Economic Research has calculated the increase from 2000 to 2011 at 112 percent.
Such innovative reforms would do far more than a one time, one year interest rate freeze to make and keep college affordable.
"If Congress does not get this done," he warned as Congress considered the rate freeze, "the average student with federal student loans will rack up an additional $1,000 in debt over the coming year more than 7 million students will suddenly be hit with the equivalent of a $1,000 tax hike."
Vicki E. Alger is a research fellow at The Independent Institute in Oakland, Calif., and director of the Women for School Choice Project at the Independent Women's Forum.
College students and the taxpayers who often help support them deserve real change, not spare change. Rather than tinkering with loan interest rates, policymakers should focus on key basics.
graduates' success in the job market. This would foster meaningful competition for students and introduce powerful pressure on existing institutions to be more efficient.
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