You know that student loan debt is a problem when the Heritage Foundation writes about it (highlights) :
A postsecondary credential is almost universally viewed as important.
At the same time, in spite of rising costs and debt levels, investments in postsecondary education continue to pay significant dividends to individuals who persevere through graduation.
The average bachelor’s degree holder who borrows leaves college with $27,300 in student loan debt. A major concern is that students often have little idea what they are getting themselves into. A majority of college freshmen are not aware of how much debt they are taking on
Recent nationally representative data detail how woefully uninformed college students are about their borrowing. About half of all first-year students in the U.S. seriously underestimate how much federal student debt they have
Students who underestimate their borrowing may end up borrowing too much and then find themselves struggling when the payments come due
This is a problem … a major problem … especially after Chairman John Kline “reformed” the student loan program to include a “processing fee” . Thanks to that “processing fee“, the Government Accountability Office estimated that the federal student loans are on track to produce $66 billion in profit for the government.
Heck, even Donald Trump has criticized the federal government for earning a profit on the federal student loan program.
“That’s probably one of the only things the government shouldn’t make money off — I think it’s terrible that one of the only profit centers we have is student loans,” Trump said. He said that college students are “swimming in these loans.”
It’s an issue that Al Franken has been working on for a long time – while the Chairman of the Education and the Workforce Committee has been silent … specifically, Senator Franken proposed in 2012 the “Understanding the True Cost of College” Act.
“The amount of debt students in Minnesota graduate with has skyrocketed, and part of the problem is that students often don’t have a clear picture of how much their education is going to actually cost them,” said Senator Franken. “My legislation will require schools to use a universal financial aid letter so students and their families will know exactly how much college will cost, and will help them compare apples to apples when deciding what school a student will attend.”
Republican Senator Chuck Grassley (R-IA) co-sponsored the legislation saying “This initiative will empower students and parents with the information they need to make the best financial decision for their families and to avoid taking on more debt than they will be able to repay. This is one way to address the problem of student debt on the front end rather than after the fact. Also, the more we can help students and parents become savvy shoppers, the more colleges will be forced to rein in rising costs to compete for students.”
Senator Franken’s proposal was met in the House with a companion bill H.R.6506 – Understanding the True Cost of College Act of 2012— and assigned to Chairman Kline … who just let it sit.
Finally, in 2015, Chairman John Kline having announced his decision not to seek re-election, may actually act.
His committee should consider (which were previously cited on the Roundtable) :
H.R.3177 : Simplifying the Application for Student Aid Act will reform the federal student aid process to help students make timely financial decisions about their education. It has 19 co-sponsors including 9 Republicans, 9 Democrats and one Independent.
H.R.3178 : Strengthening Transparency in Higher Education Act will help students gain access to the facts they need to make an informed decision about where to pursue their education. It has 12 co-sponsors including 7 Republicans, 4 Democrats and one Independent.
H.R.3179 : Empowering Students Through Enhanced Financial Counseling Act will promote financial literacy through enhanced counseling for all recipients of federal financial aid. It has 20 co-sponsors including 11 Republicans, 8 Democrats and one Independent.
There is no reason for Chairman Kline not to act.