Elizabeth Hartline Green

My close encounter with the student loan scandal…

For those of you who, like me, where shocked the somewhat nefarious tales of student loan improprieties at our nation’s finest institutions, we reached a triumphant victory on Wednesday when the House passed a bill that will cut government subsidies to lenders, increase need-based grants, and cut interest rates on loans. The bill, once reconciled with the Senate version, promises to reduce the burden of affording a college education (the cost of which has risen 40% over inflation in the last five years) on middle-class families.

I don’t know much about student loans, though I should—I am currently enrolled at Teachers College, Columbia University. I can’t tell you the amount of money my one year of graduate school at Columbia will actually cost me, though I assure you that I could buy a 2008 Jaguar S-Type midsize sedan with the money I’ll end up spending on my graduate degree.

I made it to the age of 22 without obtaining any debt through Georgia’s HOPE scholarship program, which allows all students in the state who maintain a 3.0 or higher GPA to attend public Georgia universities for free. Despite that state’s low SAT scores and abysmal graduation rates, the state has been aggressively trying to improve its education system for the last 14 years. Georgia now leads the nation in the percentage of undergraduate students receiving state grants, with 79.4% of students receiving state financial aid. Besides increasing the opportunity of every student to attend college, the scholarship has increased the quality of the state’s colleges and increased African American enrollment in Georgia colleges by 70%.

But I digress. Navigating the financial aid process, even with one college degree under my belt, was overwhelming to say the least; in Georgia, financial aid had meant filling out the FAFSA and waiting for the check. I relied heavily on Columbia’s financial aid office, turning to them for advice and assistance on who I should borrow from, how much I should borrow, and how to turn in the reams of paperwork I had to fill out. Though I felt like I was somehow signing my life I way, I saw no other way to obtain the degree I desired and, in the end, was happy with the process.

It always shocks me when public events come close to my life. One of the main players in the student loan scandal has been an official at Columbia University who received stock options for Student Loan Xpress and then placed the company on the school’s preferred lender list. Though the official worked for the undergraduate school, Student Loan Xpress made it onto my preferred lender list as well, and I considered borrowing from them. In actuality, the only thing that stopped me from using them as my lender was my resistance to the use of the word “xpress” in the name of the company to which I would be indebted to for a good number of years. I assumed that if my college recommended a lender to me, they must be trustworthy; turns out that they only needed to line the pockets of university officials.

Thus, I am ecstatic about this student loan reform bill. Besides the impact it will have on my life, it goes to show that the government can adopt policies that give a tremendous boost to those seeking to obtain or maintain a middle-class lifestyle, as well as policies that reduce corporate (and governmental) misconduct. Instead of being in the business of subsidizing huge loan corporations (who, coincidentally, donated $750,000 to members of the House Committee on Education and the Workforce from 2003 to 2004), our government can focus on the more worthwhile goal of ensuring that higher education can be obtained at a more reasonable cost.

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Posted at 8:00 AM, Jul 14, 2007 in Economic Opportunity | Education
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