With tuition costs increasing significantly each year, more and more potential students are deciding against higher education. For those students who remain enrolled, they are greeted with a mountain of debt upon graduation. Students fall into debt, student lenders get wealthier by the second – a familiar trend we have seen over the last several years.
Two students from Columbia University wish to take on higher education and propose legislation that would take about $30 billion in federal higher-education spending, and put it back into the pockets of needy borrowers. They call their proposition, the National Tuition Endowment.
The two students, Matan Ariel and Nate Walker, developed their proposal by pin pointing inefficiencies in the current federal loan program. Some of theses inefficiencies include a loophole in the current system that allows student lenders to collect 9.5 % interest from the government on certain types of loans. Also, they propose to prevent loan agencies from financing loans with tax-exempt bond issues. These two examples highlighted in their proposal will save nearly $20 billion over the next decade.
Though their plan is well structured and backed by an increasing number of students, the two realize that they have a tough political battle ahead of them. Some of the strongest lobbyist groups in DC are from large federal lenders such as Salle Mae – Getting this proposal before the House and Senate will be exceedingly difficult.
In my opinion, I think what Ariel and Walker are attempting is brilliant. There is a chance that their proposal won’t make it past committee – having been killed by potentially huge lobby action. However, the two are doing a great job raising awareness about the cost of higher education. Federal lenders cannot exist without student borrowers – isn’t it time they realize they depend on us for survival?
