Tuition Rising

P POLITICALFIBER -Presents RISING Obama's plan to curb the increasing cost of higher education Nice hat TUITION In a speech delivered at the University of Michigan earlier this year, President Obama laid out a plan to curb rising tuition costs by essentially diverting aid currently given to colleges with excessive increases and giving it to those with "responsible" prices. We will provide the support necessary for you to complete college and meet a new goal: By 2020, America will once again have the highest proportion of college graduates in the world. - President Barack Obama, Feb. 24, 2009 As with anything, the President's plan will still need Congressional approval before any change can be implemented. But here's a look at the state of higher ed in the world and a chance for the U.S. to change its standards. How do college graduation rates compare around the world? % of population entering university education % of students who graduate The biggest differential of graduates, mate! 61% 51% 50% 49.5% 48.5% SLOVAK REPUBLIC 69% ICELAND POLAND NÉW ZEALAND AUSTRALIA 77% 85% 78% 94% 48% 47% 47% 44% 42% 10 UNITED KINGDOM DENMARK IRELAND FINLAND NETHERLANDS 69% 63% 61% 55% 51% So, where's the United States? The United States ranks 15th in percentage of university graduates 37% That's not great UNITED ŠTATES 70% How much does it cost? The cost of public higher education varies greatly throughout the globe. The United States charges significantly more than any other country in annual tuition fees. UNITED STATES $6,000 -KOREA Of course it does. $5,000 UNITED KINGDOM AUSTRALIA JAPAN $4,000 CANADA $3,000 NEW ZEALAND $2,000 NETHERLANDS $1,000 PORTUGAL $500 FRANCE so DENMARK – IRELAND FINLAND – ICELAND – SWEDEN WAIT. Does that rec say $0? YEP. Countries such as Denmark, Ireland, Finland, Iceland and Sweden have much higher taxes but get benefits such as free public education from grade school through university. And although the Obama administration knows we can't get down to $0, it wants to help manage the ever-increasing fees for students in the United States. -ENTER- *****★* THE HEALTH CARE AND EDUCATION RECONCILIATION ACT That's a mouthful. The Act, proposed by the Obama administration, attempts to curb the cost of rising tuition through many different areas. Here's a breakdown: Strengthen the Pell Grant • The Act invests more than $40 billion dollars in the program • It will increase the maximum amount available from $5,550 to $5,975 S5550 $4OB $5975 6000 • By the 2020 - 2021 academic year, more than 820,000 additional Pell Grants will be available • The Act will reform current student loan programs by refusing to subsidize banks that guarantee student loans, but giving direct loans to students themselves BANK GOV'T Invest in community colleges • The Act includes $2 Billion over four years for community colleges $2B All the CCCC's! • A goal of the Act is to have an additional 5 MILLION graduates from community colleges by: • Working with businesses partnering with schools to design relevant training • Teaching basic skills and improving remedial implement new methods like and adult education simulations and multimedia • Developing online courses and other open corses that • Creating education partnerships with other higher education institutions to ensure credit transfers software Increased support for minority-serving instiutions Historically Black Colleges (HBCs) and other Minority-Serving Institutions (MSIS) have been hit particularly hard by the recent recession and cuts to education funding. • The Act provides $2.55 billion to renew, reform and expand HBCS and other MSIS. $2.558 60% 4.7 M • HBCS and MSIS enroll nearly 60 percent of the 4.7 million minority students enrolled in higher education. • HBCS and MSIls account for nearly 1/3 of all degree-granting institutions. 4 Ensure student loans are affordable The Act has a plan to revamp the current way student loans are given and payed back. • About 2/3 of graduates take out loans In the United States of America, no one should go broke because they chose to go to college. - President Barack Obama, January 27. 2010 2/3 $23,000 Average debt - More than 1.2 MILLION borrowers are projected to take part in the expanded IBR (Income-Based Repayment) program. If students choose to participate in the IBR program, they will benefit from: 15% • Limiting payments to 10% of income Current law Borrowers choosing the income-based repayment plan will pay no more than 10 percent of their income above a basic living allowance, reduced from 15 percent under current law. New law 10% 12 15 %income The basic living allowance varies with family size and is set at 150 percent above the poverty line. $16,500 $33,000 Currently, that equals: for a single person for a family of four IM eligible borrowers More than I MILLION borrowers will be eligible to reduce their payments. $30,000 / year income Payment will be reduced by more than s110/month for a singler borrower who earns $30,000/year and owes $20,000 in college loans. $20,000 in loans $110/month reduction • Forgiving any remaining debt after 20 years, or 10 years for those in public service 25 years Current law New law 20 years New law Public service workers 10 years for: Nurses leachers years These new initiatives are funded by ending the current subsidies given to financial institutions that make guaranteed federal student loans. Starting July 1, 2014, all new loans will be direct loans delivered and collected by private companies under performance based contracts with the Department of Education. Ending these subsidies should free up $60 BILLION Over the next 11 years OPOLITICALFIBER Graphic by Ben Pirotte Research by Ben Pirotte and Paul Kimball SOURCES: http://www.oecd-ilibrary.org/ whitehouse.gov/education/higher-education Congressional Budget Office