Cross-posted at WinningProgressive
President Obama on Tuesday held a rally in Madison, Wisconsin that was attended by nearly 30,000 people. The rally showed that, contrary to what the media wants you to believe, many Americans continue to enthusiastically support our President and the progressive change he is working to advance. As expected, the conservative media hardly even covered the event.
That tens of thousands of people would show up at this rally in a college town was not surprising given that President Obama and Democrats in Congress have taken important steps to help people go to college by improving the student loan system and making college more affordable. These achievements include:
- Ending Subsidies to Private Student Loan Companies – For years, the federal government has paid fees to private banks to provide loans to students. President Obama and the Democrats have made the student loan system more efficient by cutting out the middleman and having the federal government loan money directly to students. This change is expected to save approximately $68 billion in fees over the next 10 years.
- Increasing Pell Grants – Under the Democratic student loan reforms, much of the $68 billion in savings will be used to increase Pell Grants, which are needs-based grants provided to students seeking their first undergraduate college degree. The increased funding will allow Pell Grants to increase to nearly $6,000 per year by 2017 (from $4,700 in 2008), and will provide 820,000 more grants per year by 2020.
- Reducing Loan Repayments – A portion of the $68 billion in savings will also go to help reduce the burden of paying off student loans by capping the total repayments at 10% of annual income above a basic living allowance, which is one-third lower than the previous cap of 15%. For graduates who go into public service work, outstanding loans would be forgiven after 10 years of payment.
- Increasing Resources for Community Colleges – The student loan reform legislation include $2 billion in funding over four years for community colleges. In addition, last year’s stimulus legislation included substantial amounts of funding that states could use to support community colleges, and has been credited with helping community colleges survive the Bush Recession.
- Reining in For-Profit Institutions – For-profit institutions – like the University of Phoenix or DeVry Institute – have been growing significantly with 10% of the total college student population and nearly $12 billion in revenue every year. Too often, however, such institutions engage in shady recruiting and tuition practices that are good for the institutions’ bottom lines, but not for their students. As a result, students at for-profit colleges are much more likely to default on student loans than are students at other types of educational institutions. Democrats are seeking to end these shady practices by establishing a “gainful employment” rule, which would cut federal aid that could go to for profit schools if a significant portion of their students do not end up in gainful employment, and a ban on compensation incentives for student recruiters.
President Obama and the Democrats have a strong record of ending subsidies for banks that issue student loans, funneling the resulting $68 billion in savings into expanding student loans, providing aid to community colleges, and seeking to end shady practices at for-profit colleges and universities. If you support these efforts to make college more affordable, volunteer for your local Democratic candidate and write a letter to the editor to let people know about these
