The federally subsidized student loan interest (Stafford) rate expires on June 30, 2013. At that time, the undergraduate loan rate doubles from 3.4% to 6.8%. Historically, rates were set at 6.8% for both undergraduate and graduate students, until, in 2008, undergraduate rates steadily declined to the present 3.4% Congress must act or undergraduate rates will automatically return to 6.8%. Congress should set the rate equal to the 10-year Treasury bill rate. Here’s why. Continue Reading
Students could pay more to borrow federal student loans as early as this summer if a deal isn’t reached in Congress.Interest rates for Stafford loans — the most common type of federal student loan — are set to double this summer, returning to their 2008 rate.The law that subsidizes these loans will expire June 30, raising the rate from 3.4 percent to 6.8 percent and allowing the loans to accrue interest while students are still in school.The debate on subsidized student loans is a familiar one for Congress. Last summer, policymakers granted a one-year extension for undergraduate students when the same rate increase was scheduled. Graduate student loans, however, lost the federal subsidy.“Last year, the undergraduates really benefited from the pressure of the presidential campaign,” said Kris Wright, director of the University of Minnesota’s Office of Student Finance. “There was a lot bigger forum to talk about education issues.”English senior Jena Ohman said the loan increases could hurt students already grappling with debt.“It’s scary because it’s hard enough to get a job, and this will add on more debt,” she said. “Everyone is already in enough debt as it is.”In 2012, the White House estimated more than 7 million students nationwide would pay more for their student loans if the rates increased. Continue Reading
At what point does public debt become a problem? If you ask many Republicans when the debt hits 90% of GDP we’re in trouble. Given that the Federal Debt is above this level you can see why there is a push for budget control if not outright austerity. But where did that magic figure come from? Continue Reading
Higher education is in a transition period right now, according to Larry Pogemiller, director of the Minnesota Office of Higher Education. He says there’s a growing recognition that higher education is basically a market system, not a public system, like K-12. All colleges, he believes, have a vested interest in how we can better facilitate higher attainment and higher quality education. Governor Mark Dayton’s budget calls for a balanced new investment of $240 million in higher education: $80 million for direct student aid; $80 million to the Minnesota State Colleges and Universities (MnSCU) system; and $80 million to the University of Minnesota. But direct student aid, he believes, enjoys more support than aid to institutions. He calls the governor’s funding proposal for early childhood education also an investment in postsecondary education. Minnesota baccalaureates who incur debt have the third highest average debt ($29,800) in the nation. And the percentage of Minnesota students taking on debt (71 percent) is the fifth highest in the nation. As Minnesota moves into the arena of Massive Open Online Courses (MOOCs), Pogemiller believes the state must pass a law to cover the possibility of some MOOC providers offering credit for their classes. He says an effort to redesign grades 11 to 14 is basically dismantling high school and redesigning it to do a better job of personalizing it. A new application for digital devices could help students keep track of their academic accomplishments and explore possible career paths. Finally, Pogemiller is stunned at how challenging it is to create change in higher education.
There has been a lot of good economic news lately, at least compared to the very bad news of a few years ago. But that doesn’t mean that there aren’t bad things worth keeping a close eye on – especially those that predict future action by the Federal Reserve. Continue Reading
The current Congress may or may not address the Fiscal Cliff before 2012 ends. But even if it does, the odds are that any solution it affixes will fail to solve a problem that has been at least 30 years in making. The real Fiscal Cliff, or rather the Fiscal Canyon, is the longer-term disinvestment and neglect this country has made in education, infrastructure, and attending to the structural inequalities in the United States that are driving most of the problems we face in the short and long term. Continue Reading
For the past year, the Minnesota Public Interest Research Group intensely focused its efforts on defeating both the marriage and voter ID proposed constitutional amendments.Since both failed, the activist group is now honing its goals and will focus largely on higher education issues, like the 2013 budget and legislation that could provide student-loan relief.“It’s a budget year this year in the legislative session, so we really have to be defending education funding,” said Michelle Thimios, co-chair of the group’s University of Minnesota chapter. “It’s going to be a huge priority of ours this year.”In addition to working to increase funding to the University, the higher education committee will be advocating for Opportunity Minnesota — a program that would essentially forgive loan debt for students who stay in the state for work after they graduate through tax credits. It’s modeled after a program in Maine.“We’re going to be tirelessly working at the Capitol, lobbying legislators and engaging students on campus to make sure we get this passed,” said Brian Dailey-Arndt, who was elected Monday as one of the group’s co-chairs of the higher education committee.Rep. Phyllis Kahn, DFL-Minneapolis, who said she has worked with MPIRG since her first session in 1973, described the group as a “catalyst for doing things.”She said she worked with members recently on Opportunity Minnesota and thinks it’s a good idea.“Even if something’s a good idea, it’s kind of hard to dredge up support,” Kahn said. “It’s so much easier to start with a base of support and then put in the bill to follow that up instead of put in the bill and hope that the support materializes.”Monday night, the group elected leaders who will chair the group’s four committees: equality, environment, higher education and corporate accountability.Beyond higher education, the group has a long list of issues to tackle, including campaign finance reform, community gardens and no-fee ATMs on campus.Members will narrow plans in the spring after they form committees.“It kind of depends on who shows up and really what they want to work on and what they’re passionate about working on,” Thimios said.CoordinationTo accomplish its goals, MPIRG coordinates with other organizations around the state, tackling efforts from different angles.The environment committee will be working with Minneapolis Energy Options to obtain cleaner energy for the city.Minneapolis’s contracts with Xcel Energy and Centerpoint Energy will expire in 2014 and 2015, and Minneapolis Energy Options is pushing in the direction of energy efficiency, clean energy and local ownership, possibly through creating municipal utilities.“Since finding cleaner energy alternatives is always a priority, we’re going to kind of pressure them to see what they can do for us, to see if they can give us some better options,” Thimios said.John Farrell, who is on the steering committee for Minneapolis Energy Options, said a referendum on the 2013 ballot could allow the city to explore whether to make energy a municipal utility, like water currently is.The option, Farrell said, would provide the city with leverage to urge Xcel or Centerpoint to meet clean energy requirements. If they refuse, then the city could investigate forming municipal utilities.Farrell, who is also a senior researcher at the Institute for Local Self-Reliance, said he specializes in research on economics and policy around renewable energy but is not “a grassroots person.”“That’s where MPIRG specializes — getting out there and having those one-on-one conversations with people and letting them know about the issue.” Continue Reading
What’s the worst that can happen? As the deadline approaches for the Fiscal Cliff later this month, a lot of people are asking this question. It’s becoming common on both the left and the right to question whether or not we should just “go over” the edge and see what happens. Continue Reading