Obama definitely came across as a candidate favorable to the interest of students, schools, and teachers, but there’s still a whole list of political and institutional reasons why college education won’t become a free nationwide entitlement.
New financial aid and work study programs are likely to be drafted over the next year and voted on soon after that, but even then it can take another six months to a few additional years to create the necessary bureaucratic structure to administer and operate the new systems of financial disbursement.
Free college programs we might see in 2 – 3 years
- Increased funding for the Pell grant: Obama has always been a fan of the Pell grant, in fact one of his first actions in Congress was to support and campaign for higher grant funding amounts. As tragic as it is, the passing of Senator Claiborne Pell may cause more work to be done for the cause that bears his name.
- Tax-Free Income for Tuition: Students and parents who pay for tuition might soon see much larger tax deductions on income used to pay for college expenses. While the credit encourages employment, it is also planned to require 100 hours of community service for a student to be eligible. You can read more about this plan and Obama’s other higher education funding proposals here, but be warned – its a PDF file!
- Media Campaigns / Increase Public Awareness of Free College Opportunities: Sort of like what I try to do here with this blog, I guess! There’s been a big problem over the last few years and it seems to be getting worse: Students are either unaware of college funding opportunities that are available to them or they’re put off by the complexity of the process. While Obama hopes to streamline the FAFSA and financial aid process into the tax process, there’s still a lot of people that just don’t realize how much money is available for college students and the parents of those students. More than a million eligible students fail to apply for free federal financial aid every year!
A College Reform Proposal that Might Not Happen So Soon
- Eliminate student loan banking subsidies: One idea that Obama has campaigned on is cutting off the student loan industry from the lucrative federal subsidies that virtually guarantee profitability of student loan companies. The problem with getting rid of these subsidies is not just that there are financial interests influencing congress, but also that these loans provide the money required to keep our colleges full of tuition-paying students. Student loans are big business, and if the government tries to take on all of the industry’s functions there may be problems and deficiencies in marketing, customer service, and consumer awareness of available opportunities.
Or Anything Could Happen
The problem with speculation is that it’s often wrong. Unforeseen events could unfold over the next six months and completely derail any potential interest in higher education and college funding reform. With the way the economy is headed, perhaps we should even expect that further financial pressure will deflate some of the initial goals laid out in Obama’s campaign plan. And even though Congress is filled with Democrats who are likely to support Obama in general, there is also a strong likelihood that Senators will use federal financing legislation to promote projects of interest to their local and state constituencies.
Even if the programs do start to be implemented soon, free college will still require drawing on multiple sources of funding. There will just be more federally funded sources!
January 3rd, 2009 at 9:09 am
With regard to your third point about lender subsidies: Congress already cut these severely in 2007, which is why lenders started leaving the student loan business before the current economic crisis. I think that eliminating the FFELP is probably the reform most likely to occur under President Obama. He has indicated that he supports the Direct Loan program over the FFELP and schools have been switching to the Direct Loan program in droves.
As far as any sort of consumer outcry, students and their families are aware that any benefits under the FFELP have disappeared.
Direct federal student loan
January 5th, 2009 at 1:21 pm
College has become the defacto standard if you want to make more than $20k/yr. It also has become a huge burden on students leaving college. I know more than 15 people with $20k+ in loans and at least 4 people that have $50K or more in loans.
Why can’t there just be unlimited loans from the government. The real problem here is bank officials sitting in offices at colleges pretending to be associated with the college and charging insane rates for borrowing.
Perhaps if you are going to college fulltime you can just not get taxed on your income. It would save my wife and I enough money to send one of us to school for the entire year.
If we stop helping people that want to get ahead we will have to pay more for them on welfare when all they want to do is smoke crack and have babies. Now THAT costs some serious money and it just starts the cycle over again. Every 16 years.
April 8th, 2009 at 12:51 pm
My son has a $7800 balance at a four year college in Virginia. Due to my
credit problems I could not qualify for a Parent Plus. My son and I have put in
for all kinds of scholarships hoping to get some relief. If that is not paid before
the Fall of 2009 he cannot return. Please share my story and give some help
getting this to Congress, etc.
May 24th, 2009 at 6:40 pm
Is Obama offering single parent moms financial aide for receiving graduate degrees?
March 14th, 2010 at 6:21 pm
We told our kids that if they worked hard in school, stayed off drugs and alcohol, and generally made good choices, they could go to college. We have been lying to them this whole time. We make too much for financial aid, can only just make ends meet, but we can’t come up with 10000 a year for college. Guess what kids, all that hard work and you can’t go to college!
September 26th, 2012 at 10:08 pm
This would be a great change for our society and in the long run would lead to a better and more educated country. For the government to pay for college tuition would change not only peoples view on the government but it would also help stimulate the economy with a decrease in unemployment and more money being spent.