Megan Reed, Campus Carrier News Editor
The White House released a statement last week detailing a plan aimed at making college more affordable.
The press release, released on Aug. 22, stated that higher education is “the single most important investment students can make in their own futures” but that getting an education “has never been more expensive.”
Berry’s tuition is $1,440 higher this academic year than it was last year, while the average tuition at a four-year public university has increased by 250 percent over the past thirty years. However, the average income of a family has only risen 16 percent, so many families are struggling to pay for college.
Many students and their families choose to take out student loans to help with college costs. While loans do help students afford college, many students are in debt after graduating. The average borrower now graduates with over $26,000 in debt, according to the White House press release.
The Obama administration plans to help struggling college graduates by establishing a Pay as You Earn program, which will cap student loan payments at 10% of the borrower’s income. This payment plan would be available to any borrower who needs it.
An enrollment campaign for this program will begin this fall, and the Department of Education will contact borrowers who have fallen behind on their loan payments and undergraduate borrowers with especially high amounts of debt. This campaign will continue into the future so that students know what their options are when they need to repay their loans.
76 percent of Berry students took out a federal student loan in 2012, Marcia McConnell, director of financial aid, said.
The student loan interest rate is currently 3.86% for undergraduate students. Legislation passed last month allows for the rate to increase with market rates, although the interest rate for undergraduates is capped at 8.25%. The rate had doubled from 3.4% to 6.8% in July after Congress failed to reach an agreement. The new interest rate will apply to all loans taken out after July 1.
“I know students are wary of an increase in the rate because they want to be able to pay back student loans, myself included,” sophomore Rachel Blair said.
The press release also proposed establishing a new college rating system by the 2015 school year. Colleges will be rated on affordability, graduation rates and graduate earnings. These ratings are intended to help students make informed decisions about which college to attend. Federal aid to colleges will also be based on this information, although Berry does not receive federal aid because it is a private college.
McConnell said she believes this rating system will be beneficial to students trying to choose a college.
“Anything that can be provided to students to give them a clear picture of the cost associated with colleges we’re encouraged by,” McConnell said. “We definitely believe in consumer information and being able to educate students on affordability.”
Student aid will also be based on these ratings by 2018. Students attending highly rated colleges could receive larger Pell grants and more affordable loans.
Pell grants are available to undergraduate students and do not have to be repaid. Eligibility is determined by the student’s Expected Family Contribution, which the student provides on their Free Application for Federal Student Aid (FAFSA). 25 percent of Berry students received Pell grants in 2012, McConnell said.
Also, according to the White House press release, schools with high dropout rates will be required to disburse student aid over the course of the semester rather than in one lump sum at the beginning of the semester. This will help prevent the waste of Pell dollars.