While Congressional Republicans are looking to cut Pell Grants to low-income students — calling the maximum award “more generous” than the government can afford — and with even President Obama trying to reduce the program’s cost (by ending the summer Pell program), student debt is still spiraling ever upward. According to the latest data from FinAid.org, the class of 2011 will graduate this month as the most indebted ever:
The Class of 2011 will graduate this spring from America’s colleges and universities with a dubious distinction: the most indebted ever. [...]
With tuition rising at an annual rate of about 5% and cash-strapped parents less able to help, the mean student-debt burden at graduation will reach nearly $18,000 this year, estimates Mark Kantrowitz, publisher of student-aid websites Fastweb.com and FinAid.org. Together with loans parents take on to finance their children’s college educations — loans that the students often pay themselves – the estimate comes to about $22,900. That’s 8% more than last year and, in inflation-adjusted terms, 47% more than a decade ago.
Th recent rise in borrowing to finance higher education has been nothing short of meteoric. According to the Pew Research Center, students in 2008 borrowed 50 percent more to finance their education that students in 1996. As former President Bill Clinton said, “higher education institutions are pricing themselves into America’s decline.” The country is already on pace to be short 16 million college educated workers by 2025, a trend which constantly climbing costs certainly won’t help to reverse.
As Ed Money Watch explained last week, Republicans on the House Budget Committee have laid out a variety of ways they’d consider paring back the Pell Grant program, including reducing the maximum award, lowering the income threshold for qualifying for Pell from $30,000 to $20,000, and terminating eligibility entirely for those students who qualify for the minimum award. But cutting Pell would undermine the country’s already rapidly shrinking supply of human capital.