Education Policy – Higher Education Financing
June 30, 2014
Author: Kat McKay, C’17
I came to DC this summer as a blank slate. This city and its system of agencies, politics, and public policy proposals has played a major role in shaping my ambitions even though, up until a few weeks ago, everything I knew about Washington came from either the media or a handful of Penn speaker events. So my DC learning curve has been steep, especially considering the depth of political knowledge that I personally wanted to establish for myself.
As an intern for Penn Wharton PPI, I study tax- and education-related public policy proposals. My research, which usually consists of summaries of events and papers, goes into Penn’s collective pool of policy information. Then, if a professor wants to write an issue brief on, say, financing higher education, he or she could access my summaries and get an idea of what has been done on that particular topic in DC recently. As a natural extension of this internship structure, I have become familiar with a lot of the major players and ideas cycling around DC that relate to education.
One of the main issues at play in education policy right now is the financing of higher education. Democratic Senator Elizabeth Warren from Massachusetts introduced her ‘Bank on Students Emergency Loan Refinancing Act’ earlier this summer, which laid out new interest and refinancing rates for student loan borrowers. The bill, which failed to pass in its original Senate vote, addressed one of the most serious issues facing college graduates today: the $1.2 trillion dollars of student loan debt held nationally. Republicans called out Warren’s bill as an election year political move, but they agreed on its main premise that our system of financing higher education needs to be restructured so that it is more sustainable and has less of a negative impact on the students themselves.
After the Warren bill died on the Senate floor, I attended a Department of Education event where Secretary Arne Duncan laid out his plans to alleviate the burden of student loans on individual borrowers. Duncan said that the ED wants to “focus on [college] completion rates as a metric of college value,” so that families and students can make better decisions about which colleges and programs yield a high rate of return, and “raising public awareness about [ED] programs through sophisticated communication,” so that American students understand what their financing options are. The US government currently gives out more than $150 billion in grants and loans each year, and between 41 and 73 percent of all college graduates finish school with loans, depending on their state.
Washington did not teach me that student loan debt exists—I know that because I’m a student and I understand that my college education is the single most significant expense of my life to date. But by studying education policy this summer, I have become aware of what our government and public policy thinkers are doing to try to help lift the burden of student loans.
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