While the souring economy has left many industries struggling, that's just not the case for private education lenders and textbook publishers. The desolate job market has spurred an ongoing spike in college enrollment and -- with tuition and fees rising twice as fast as inflation -- banks have generated enormous earnings by lending to strapped students. At the same time, publishers have jacked up the cost of textbooks, which now rival the tab for a semester of community college. As we've pointed out repeatedly, Congress' history of putting bankers before students coupled with Illinois officials' recent cuts to state-subsidized financial aid has left a growing number of students buried under a heap of debt. Over the weekend, the Peoria Journal-Star's editorial board identified these disturbing trends in higher education and wondered if "Illinois colleges are to be for the privileged only."
A few members of Illinois' congressional delegation are trying to ensure that's not the case. Regular readers know that this year is shaping up as one with historic potential for reform. Just last month, the House passed the Student Aid and Fiscal Responsibility Act of 2009 (H.R. 3221), which would free up $87 billion over the next decade by pulling the plug on the Federal Family Education Loans (FFEL) program that has allowed bankers to siphon away federal education money at the expense of students. The measure would in turn use that money to raise Pell grants to $6,900 from $5,350 and guarantee their future funding. On a swing through Northern Illinois University on Monday, Rep. Bill Foster urged Illinois' college students to push back against lenders who are fighting the reforms in the Senate. If the bill passes, it will amount to the largest increase in student aid in the nation's history. More from the Northwest Herald:
“You need to get involved, and call your senators,” Foster told a crowd of students gathered in the Sky Room of the Holmes Student Center. “This issue is too important to let sit.”
Foster is also joining Sen. Dick Durbin in his ongoing effort to drive down the cost of college textbooks. Last week, Durbin introduced the Open College Textbook Act (S. 1714), which would create some competition against publishing companies who have found a way to profit by slipping costly supplemental materials -- such as online guides and CDs -- into textbook packages. As a result, the Public Interest Research Group estimates that the average student will spend between $800 and $1,200 on books alone this year. Durbin's proposal would create a grant program that rewards universities who create books that are accessible on the Web. Foster's bill -- the Learning Opportunities With Creation of Open Source Textbooks (LOW COST) Act of 2009 (H.R. 1464) -- would require federal agencies that spend upwards of $10 million a year on scientific outreach to set aside at least 2 percent of their budgets to create their own open-source materials. During an interview with WGIL, Durbin explained his frustration regarding this issue:
"I've been in a battle for years now with the textbook publishers who've been ripping off kids and their families, I think, with outrageous charges for textbooks," Durbin says. "Now, we've got to find ways to deliver the information that young people need to learn in the most cost-effective way. I think this is it."
As for Illinois officials, we're still waiting to see how they'll address the $220 million shortfall in the Monetary Award Program (MAP) that's left 138,000 college students in the lurch this spring. Today and tomorrow, Gov. Pat Quinn will rally with students at the University of Illinois and Southern Illinois University and once again push his proposal to fill the shortfall by adopting a $1 per-pack cigarette tax. Hundreds more students will take that message to the General Assembly on October 15 when the veto session begins.
Well give the PJ-Star editorial board the last word: "[L]awmakers would do well to keep in mind that for the modern economy, a college diploma is no longer the luxury it once was. It's a necessity, if Illinois is to keep up with the rest of the world. Find a way."
Image used under a Creative Commons license by Flickr user Amin Tabrizi.
Comments
Skeptic (not verified) on Wed, 10/07/2009 - 11:11
I'm sorry, but this is one of the most ill-informed pieces of writing I have seen in quite a while. You're representation of H.R. 3221 is way off-base and presents readers with an absurdly false notion of "historic potential for reform" with this legislation.
What this legislation does is address the back-end financing of federal student loans. Because the federal government has such a low-cost of funds, they earn a hefty profit on these loans. These profits, earned off of the backs of middle class students and families, would then be redistributed in the form of Pell Grants and spending on other education initiatives the feds deem more important than making college more affordable for everyone.
The $6,900 Pell figure you quote does not come to fruition until 2019 and the guarantee of future funding does not exist. It was promised by President Obama, but the administration has now gone back on their word, instead spending these profits on other things. Does that sound like a great deal for students to you?
As far as these supposed profits from lenders, guess how much they were paid on loans this past quarter: 2.08%. That's right, the lender made 2.08% on your 6.8% loan payments. The rest went back to Uncle Sam, so the government could take these earnings and spend it on other things.
If you really want to talk about college costs, perhaps the first step would be to look at tuition. Instead of doing that, H.R. 3221 takes the easy way out, providing a small increase in grant funding for individuals and a continuous stream of funding, making it easier for schools to raise their tuitions.
This legislation does nothing, and may even take a step back, in "solving the college cost problem." Instead of rehashing Democratic talking points, a truly "progressive" thing for this blog to do would be to take a closer look at the issues and propose real solutions to address the underlying problem: college tuition is rising at a rate that is not sustainable.
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