5 Takeaways from Obama's College Loans Q&A
The rising cost of a college education has left many students unsure of how to pay for college. The result? The U.S. now has the highest level of student loan debt in history — more than $1 trillion — and an entire generation of college graduates is left feeling defeated and helpless.
Americans, frustrated with the status quo, are desperate for real-world solutions to the problems that plague the higher education system. The Obama administration has proposed a comprehensive student loan bill aimed at providing several layers of assistance to students caught in the student loan debt trap, and Obama also signed an executive order expanding eligibility for the government's most generous income-based repayment plan. But will it be enough?
These issues, among others, were confronted head-on by Obama on Tuesday when he participated in a Tumblr chat moderated by the site's 27-year-old founder, David Karp. Obama fielded questions that had been submitted by Tumblr users and covered topics such as the importance of higher education and the value of college, affordability and reducing student loan debt. We watched the Q&A live to see what he had to say. Here are five main takeaways:
1. Student loan debt is a significant and growing problem.
The average debt burden for today's college graduates is around $30,000, significantly more than the debt load of previous graduates just decades ago. Unfortunately, it's only expected to get worse in the short-term, as states continue to face increasing pressure to cut education spending and tuition prices continue to skyrocket for already cash-strapped students. Something has to be done.
2. However, a college degree is still worth it.
Despite the rising costs of a college education, higher education is still a good investment. In fact, as Obama pointed out, the average college graduate earns nearly $28,000 more per year than someone without a college degree. The system might not be perfect, he argued, but it's still worth it.
"A college education is the surest, clearest path into the middle class for most Americans," Obama said during the Q&A.
3. Real change needs to be implemented at the high school level.
Too often, high school students head to a four-year college without ever considering other options. Obama said he hopes to encourage high schools to encourage their students to investigate career options outside of a traditional four-year career path. "Too many of us see college as a box to check … as opposed to an opportunity … to figure out what we are good at," Obama said.
Those who pursue a career in plumbing, electricity or carpentry, for example, can enjoy excellent career prospects and high earnings without having to endure significant student loan debt or unnecessary time in a classroom. These types of options need to be offered by schools and explored by students, Obama said.
4. College students need to take some responsibility.
The Obama administration is currently working on several measures to help students navigate their options when it comes to student loans. These include "Know What You Owe," a project aimed at improving transparency when it comes to college tuition and the overall costs of student loans. A new college ranking system that would help students identify good values and steer clear of bad ones is also in the works, though few details were released.
Obama said hopes that these measures will help students make informed decisions that won't leave them with burdensome student loan debt that lasts for decades. "It is imperative for young people to be good consumers of education," he said.
5. Help is on the way.
This week, Obama issued an executive order aimed at extending certain income-based repayment options to student who took out college loans before 2011. Meanwhile, the United States Senate votes next week on a bill that would allow students to refinance their student loans at today's record-low rates. Those reforms, and others, have the potential to level the playing field when it comes student loan debt and each individual's ability to repay their loans in a timely manner. In the interview, Obama encouraged those passionate about this issue to contact their legislators to see where they stand on the proposed legislation.
The cost of a college degree has become a huge burden on the very young adults (see: Is Online College Cheaper?) we will one day rely on to carry this country into the next century and beyond. However, Obama said he hopes that his administration's new ideas will create more options for college students who are becoming increasingly wary of the value of a college education.