Editorial: Peering Over the Fiscal Cliff, Student Aid in Trouble
Opinion – Americans are less than two weeks away from choosing the country’s next leaders.
As a student of Portland Community College, I often discuss politics with my classmates.
Around Sylvania campus, students give mixed reactions about the upcoming election.
Some of my peers have a strong grasp of how our system of representative government works.
On the other hand, some students – through either frustration or ignorance – express a disconnection between voting, and how election results affect Americans in their day-to-day lives.
It is disheartening, because these students don’t understand their financial aid is precariously teetering on the edge of budget cuts and financial collapse.
Students must demand our leaders treat education like a gift to free people rather than as a commodity to be bought and sold.
Students are facing two main factors in the growing financial aid crisis. The first pitfall involves the future of Federal Pell Grants as lawmakers deal with a looming financial crisis.
Congress put off all of its important financial decisions until after the November presidential election.
Once we choose our next leaders, Congress has less than two months to come up with a new budget deal or 1.2 trillion dollars in Bush era tax cuts and subsidies will end on January first.
If an agreement isn’t done by then, the country will move into what’s called sequestration, where hundreds of key programs will lose a large portion of their funding overnight.
This rapidly approaching deadline is also referred to as the fiscal cliff.
What’s worse, a lot of students who are taking loans to pay for school are not paying them back.
This could get worse if interest rates double, causing another possibility for a speculative bubble much like the housing crisis of 2008.
The United States is running out of money, so lawmakers will be forced to make tough decisions across a spectrum of issues and programs.
Both President Barack Obama and Republican presidential nominee, Governor Mitt Romney, are campaigning on the idea they can help harbor a budget deal that would avoid sequestration.
Last month, According to a report by Darren Samuelsohn, filed on the website Politico, Romney blasted the plan as being “a strange proposal in the first place.”
In the final presidential debate at Lynn University, Obama promised to avoid the fiscal cliff, “[t]he sequester is not something I propose. Congress proposed it. It will not happen.”
What neither of these men wants to admit, however, is that they have little control of what budget congress will churn out.
United States Senator Jeff Merkley visited the students of Sylvania campus recently for Voter Registration Day.
As editor of The Bridge, I was delighted to be a part of the entourage following the senator around campus.
He spoke to a small crowd of students and administrators in the Cedar Room before visiting two classrooms and talking to student constituents along his travels.
Merkley, much like the character Jimmy Stewart played in Mr. Smith Goes to Washington, has a hometown swagger — like a cowboy economist.
The first term senator from Oregon was charming and sincere.
However, like all good politicians, Merkley’s job was to rally people for his causes.
At each location, the Oregon Democrat encouraged people to register to vote, then politicked about “the issues” that “might concern” students such as the “war in Afghanistan,” “fixing the environment,” and “the economy.”
Merkley’s spiel, which felt forced and uncomfortable, stripped the senator of his normal charm, and left students disinterested.
During each of these encounters, Merkley said little about student financing, and when students had a chance to question him, the crowd sat mostly silent.
Students didn’t realize that this guy and his friends write the country’s checks. Unlike the president, the junior senator does have budget powers.
As part of my role for The Bridge, I had the opportunity to ask Merkley some serious questions about student financing and the future of Federal Pell Grants.
What he told me was somewhat surprising. Facing this financial cliff, I asked, what is the future of Pell Grants?
Merkley, known as a champion for Pell Grants said “every program right now […] is part of the conversation.”
As a current student who receives these grants, Merkley’s answer staggered me like a boxer taking a vicious left hook.
The shock was slightly softened, however, when Merkley continued on to say, “We need to prioritize those things which help us have successful children, and a successful economy. Student aid should be right at top of the list [for programs to keep].”
Even both presidential candidates have promised to keep and or expand the students who will receive Pell money.
We must wait to see whether either man can keep the program going with such economic uncertainty.
The loss of Federal Pell grants is not the only problem facing students.
A report by the U.S. Federal reserve of New York called “Grading Student Loans”, and published in the agency’s Liberty Street Economics, showed the country’s total student loan debt of $870 billion, surpassing the country’s total debt for credit card or auto loans.
One-in-five Americans have college debt, of those, one-in-six are in default.
This is a huge problem, especially since interest rates on student loans could double.
Many students are already strained in this tight economy and an increase could force even more into default.
Merkley told me that “students should really consider which classes they are choosing to finance” because unlike other kinds of debt, student loans cannot be relieved by bankruptcy.
Essentially, students are responsible for the classes they choose, because that debt could follow for many years.
Many Americans are gambling with future financial stability, all in hopes of graduating and landing a job which pays enough to satisfy these debts.
Multitudes of our PCC peers pay for most of their education with Pell grants.
The odds are quickly stacking up against students as unemployment remains bleak, and the possibility of an interest rate hike on loans feels nearly inevitable.
This idea is wretched considering the near zero percent interest rates the Federal Reserve gives emergency funds to banks considered “too big to fail.”
Students need to demand the same deal from our leaders, and we should rely on our ballots to prove our power.
Students should remember there has never been a more important time than now to act, and the election is only the first step in involvement.