Nearly all of the future growth in good jobs in Maine will require education and training beyond high school. However, a large majority of those pursuing the education needed to be prepared for those careers have had to take on unsustainable levels of debt.
Student debt levels in Maine are already bad enough. In 2010, 68 percent of Maine college graduates went into debt to earn their degree, averaging $29,983 — the second highest student debt of any state and the highest as a percentage of income.
And, right now, Congress is on the verge of making things even worse. On July 1, the interest rate on many federal student loans is set to double from 3.4 percent to 6.8 percent unless Democrats and Republicans act soon. Sens. Olympia Snowe and Susan Collins both backed the College Cost Reduction and Access Act of 2007, the act that set the lower interest rate. However, extending the rate has become another in a long line of unnecessarily partisan fights in the Congress.
If Congress lets this interest rate double, 34,849 federal student loan borrowers in Maine will be affected, according to data from the federal Department of Education. For every year the lower rate is not extended, the average cost per borrower will increase by $980 over the life of the loan, sucking nearly $35 million in additional interest payments out of Maine’s economy.
That’s nearly $1,000 in increased costs per borrower per year, money that is not available to help young people start a family, purchase a house or a car or make other investments to get their life started. That’s an additional $35 million per year that isn’t supporting Maine’s economy.
Certainly, much more could and should be done to make higher education more affordable. Colleges and universities need to do their part to hold tuition and expenses in check. And individuals and families must borrow responsibly, borrow only what they need and avoid risky private loans, which come with much higher interest rates and few consumer protections.
Financial aid offices can help by making sure students exhaust any and all forms of federal aid before suggesting they turn to private loans. According to the Project on Student Debt, “the most recent federal data show that a majority of private loan borrowers could have borrowed more in federal loans before turning to private loans.”
Here in Maine, at least, it’s not all gloom and doom. Thanks to a citizen initiative a few years ago, Maine now has the boldest college affordability program in the nation.
The Opportunity Maine Program allows those who earn an associate or bachelor’s degree at a Maine school to be reimbursed for student loan payments through a state income tax credit for any years they live, work and pay taxes here after graduation. The value of the credit is capped at the rate of in-state tuition and fees at our public institutions, thereby encouraging responsible borrowing.
This is an incredibly valuable support for Mainers pursuing the education they need, but it doesn’t change the fact that more must be done to hold down the cost of higher education in the first place. In that respect, Congress needs to do its part to keep the cost of student loans in check.
This really should be simple. Something is wrong with the priorities in Congress when they will write a blank check for zero-interest loans to Wall Street but they can’t agree to provide a small amount of help to the millions of Americans trying to gain an education.
If Congress doubles the interest rate on federal student loans it will be responsible for saddling Maine borrowers with an additional $1,000 per year in interest payments, costing Maine’s economy nearly $35 million. Let’s encourage Maine’s Congressional delegation to break the familiar Washington, D.C., pattern and offer a bipartisan solution to prevent this.
Rob Brown is the executive director of Opportunity Maine.
The very first paragraph of this article shows the problem not just in Maine, but in America. And it shows why we should, like many other countries, tax the rich to give our students much cheaper education.
Not taxing the rich enough is not the problem, the problem is 47% of the populations pays NO income tax. Create a flat tax that fairly taxes EVERYONE 12% and we will be awash in revenue.
Sounds great Tom until you realize one tiny thing. A flat tax without the jobs to support it is not a flat tax but a HUGE tax break for those in the upper bracket’s. People that don’t have, or can’t get job’s since they are being held back in order to get business’s a more, if not completely, unregulated, labor market are being deliberately kept from these job’s simply because they want to work for a fair wage. The current business enviroment is so toxic to that simple concept that Business has decided to simply wait until the average worker is so starved or beaten into submission that they’ll take any job at any pay rate simply to survive. That’s the real business model that’s being used right now. And you want to put a flat tax on people working, or trying to work, under that ? Nice to see which side of the road you’re on.
The ‘flat tax plan’ is nothing more than a Koch Brother’s / Grover Norquist / Mitt Romney inspired giveaway of the country’s ability to finance itself responsibly. And until the bank’s and the various financial institution’s start putting some of that TARP money out where is was supposed to go in the first place, instead of sitting in their vault’s or on their Corporate Balance Sheet’s collecting dust AND NO INTEREST, the Country, and it’s small business commnunities, are going to continue to struggle to get theselves out of 1st gear. The longer, and the more public, this is seen and allowed to go on by the business community, the worse it’s gonna be come November for those who chose to keep riding this ‘horse’. Add the GOP blackmailing of the Country and the college student’s over the Student Financial Aid interest rate issue on top of the GOP refusal to let the Bush tax cut’s expire and, for both the GOP and the Tea Party, the literral writing is already seen on the wall.
your answer is so typical of someone that does not have a clue as to how an economic system works
No Sir but I do know political manipulation of the economic system to cover up unbridled greed and corruption when I see it. That’s what’s behind the GOP’s numerous Super PAC’s, trying to hide greed and an addiction to power behind a series of press release’s and rationalization’s. If those of you who are currently believing that the GOP and their Tea Party buddy’s are fighting for you, I would seriously suggest that you start, on your own, start looking at the direction, and the logic behind, the various Party’s economic plan’s. Add to this the current direction that each Party is looking and trying to proceed in and the result’s are painfully obvious who is moving us forward and who is grabbing at ‘the good old day’s’.
Cm’on folk’s, the Country was founded on the concept that the Country would always move forward since, if something didn’t work, the only real option was to move forward. And no, I don’t work for MSNBC. But it is clear that, as a Country, we need to move forward and improve our Country, not trying to look back and hanging on to history. History provides a guidepost to navigate by, not be the only goal. Time, and human nature, move on, no matter how much some of us wish it didn’t. It’s time to grow up and move on to improve our State and Country. To do anything less is just plain old cowardice. And given the recent antics in both the House in Washington and in Augusta with ‘secret poll’s’ isin’t about time we all called the antics for what they are and move on.
The Country (sic) was founded on a belief that individual freedom and free enterprise is key to economic growth and prosperity. Looking ‘back’ at such founding blocks of our country can be no better shown than by a review of Thomas Jefferson’s critique of de Tracy’s Treatise on Political Economy: “To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association -“the guarantee to every one of a free exercise of his industry and the fruits acquired by it”
47% of the population being kids under 18 with part-time jobs, students in dorms, senior citizens on fixed incomes, some rich people who abuse loopholes, and then — eventually — some poor people.
Now explain to me how you think taking an extra $2,400 out of your grandmother’s pocket is the correct way to balance the budget. Or maybe they can take $1,200 out of your neighbor’s unemployment.
You are wrong, look it up…47% of those FILING tax returns pay nothing or get an earned income credit.
I wrote a comment and then deleted it. I’m not going to debate with someone who tells me to “look it up” after I gave data that clearly shows I did.
You can’t handle the truth:
http://money.cnn.com/2009/09/30/pf/taxes/who_pays_taxes/index.htm http://www.ntu.org/tax-basics/who-pays-income-taxes.html
The economy collapsed, tuition costs have exploded, there are no jobs, and these kids are being blamed for it. They’re not the me-generation, they’re the scapegoat-generation.