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I just wanted to flag this little item in yesterday’s New York Times, for the benefit of local college students and othe readers of this blog:
Four months ago, it appeared all but certain that the White House and Democrats in Congress would succeed in overhauling the student loan business and ending government subsidies to private lenders.
President Obama called the idea a “no-brainer” last fall, predicting it would take billions of dollars from the profits of private lenders and give it directly to students … But an aggressive lobbying campaign by the nation’s biggest student lenders has now put one of the White House’s signature plans in peril.
The way student loans currently work is this: Private companies like Sallie Mae make out loans to students. But even if a student defaults, the bank carries no risk: These loans are fully backed by the government, so the bank makes out either way. Student loans are, in essence, a license to print money … while burdening young workers with debts that can take years to pay.
There’s no reason why the government couldn’t just issue the loans directly — taxpayers are on the hook anyway, and cutting out the middle man could save up to $8 billion a year. That’s $8 billion coming from the pockets of students across the county — including here in Pittsburgh. And it’s money the Obama Administration would like to plow not into CEO bonus pay or shareholder dividends, but into Pell Grants and other initiatives to help students.
Can you guess where I’m going with this?
Late last year, Mayor Luke Ravenstahl proposed a “tuition tax” on students, a 1 percent levy on the cost of their tuition. Students showed up at city council meetings in opposition, while their schools took some of those hard-earned tuition dollars to buy ads in the Post-Gazette, opposing the tax. The consensus was that asking these students to pay a couple hundred bucks a year imperiled student access to education.
Ravenstahl’s initiative went nowhere. The tax was shelved, in exchange for an undisclosed sum from the University of Pittsburgh and other institutions. There was also a promise that Ravenstahl and the colleges would work together on a better means of funding city operations. But based on recent utterances from university leaders, that may not amount to much: The rhetoric you hear in op-eds today is exactly the same as the rhetoric you would have heard six months ago.
(We should note, though, that Ravenstahl did hold his first meeting with colleges and other local leaders on the matter this week. It appears to have been convivial … as early meetings so often are. Oh, and Ravenstahl’s confidante John Verbanac was there, so clearly the mayor takes it seriously.)
But since the universities are so concerned with the financial well-being of the students, I’d like to suggest another coordinated effort, this one on the national front. Schools all across the country were watching to see what would happen to the schools in Pittsburgh: Now our local universities have a chance to lead by example again.
Let’s see Pitt and CMU and the rest start taking out ads in the Times and the Washington Post. Let’s see those passionate, principled undergrads and grad students bused down to D.C., so they can put a public face on this issue. I’ll be surprised to see the universities go too far out of their way to help bail the city out of its debts. But it shouldn’t be too much for them to try to reduce the debt facing their own students.
This article appears in Feb 4-10, 2010.
Hey Chris,
This has already been a very active issue on Pittsburgh campus’
http://www.pittnews.com/article/2010/01/14/advocacy-groups-use-drinking-promote-tuition-aid-awareness
http://www.pittnews.com/article/2010/01/28/beitzel-obama-ready-revamp-education-are-students
Besides district office visits, petitions, phone calls, and student newspaper coverage Pitt students will also be sending a substantial delegation to DC in March through the United States Student Association to lobby on this bill.
http://www.facebook.com/group.php?v=info&ref=ts&gid=90018797192
http://www.usstudents.org/our-work/trainings/legcon
The University of Pittsburgh also supports the change to direct lending.
Daniel —
I did see the Pitt News stories (full disclosure: I sit on the Pitt News Advisory board). And I’m glad to hear that student groups like the USSA are organizing these other efforts. But what I’m really looking for is the universities THEMSELVES to commit the kind of energy and resources to this issue that they committed to fighting the tuition tax. Pitt didn’t just “support” the opposition to the tuition tax. It led the fight. It and other universities paid for the ads. Having established itself as a political player locally — and having made clear that it aspires to a national reputation — it has an opportunity to flex its muscles on a bigger stage. To play a role that could benefit countless numbers of students all across the country.
But basically, I won’t be happy until the face of Daniel Jimenez is smiling up at me from the pages of The New York Times.
Don’t hold your breath, Chris.
The last time, no matter what their ads and their overheated rhetoric said, the universities were really fighting for themselves. This time, they’d be fighting for their students.
And that, like the distinction between 1% tuition taxes and 5% tuition increases, will make all the difference.