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Education

Michigan Democrats Unveil Plan To Finance Free College Tuition By Eliminating Corporate Tax Credits

By Tanya Somanader on Jan 17, 2012 at 6:05 pm

Michigan Gov. Rick Snyder (R) spent his first year in office trading in the welfare of thousands of vulnerable Michiganders in order to cut taxes for corporations and the wealthy. Hoping to refocus priorities in 2012, the state’s Senate Democrats have released a new plan that puts Michigan students ahead of wealthy corporations.

Under the Michigan 2020 Plan, Michigan’s high school graduates will be eligible for free tuition at one of Michigan’s community colleges or universities, where the median tuition level is currently around $9,575 per year. The program will be funded entirely by eliminating $3.5 billion in tax credits and loopholes and putting that money towards students:

“Study after study after study has emphasized the importance of a highly educated workforce in the economic vitality of any state in the 21st century,” said Senate Democratic leader Gretchen Whitmer, D-East Lansing.

Michigan currently pays out roughly $34 billion in tax credits. Under the Michigan 2020 Plan recently unveiled, $3.5 billion in tax credits and loopholes would be eliminated. Democrats put the tuition proposal’s cost at least at $1.8 billion. [...]

Under the plan, graduates who spent their entire K-12 years in Michigan schools would be eligible for the full award, which equates to the median tuition level of all public universities — currently $9,575 per year. Those who attended school for awhile outside the state would get a percentage of that amount.

College tuition has tripled in the last 30 years and is only trending upwards. Indeed, college price tags could get as high as $422,000 come 2034. And with student loans increasingly hard to find in a restricted credit market, families could certainly use the help in sending their children to a college close by.

What’s more, Michigan Senate Democrats note that the elimination of $3.5 billion in tax loopholes is only a 10 percent reduction in the tax credits the state already doles out. In fact, the program costs almost exactly as much as the $1.7 billion tax cut Snyder implemented for corporations.

The plan should appeal to Republicans as “it can be done without raising taxes one cent,” said Whitmer. “It’s not about whether Michigan can afford to do this, it’s whether we can afford not to.”

Education

New Hampshire Students Carry The Nation’s Largest Debt Load And The GOP Has No Solutions

By Pat Garofalo on Jan 10, 2012 at 9:35 am

One of the most important issues for the 99 Percent Movement and the Occupy Wall Street protesters who took to the streets in cities across the nation last year is student debt. Average student debt in America has hit a record high of $25,250 per student, while outstanding student debt is around $1 trillion.

Today, New Hampshire voters will select their preferred Republican standard bearer in the GOP presidential primary. But when it comes to economic policy and concern for the 99 Percent, the voters don’t have much of a choice, as the candidates are largely in lockstep. And that is doubly true when it comes to student debt, even as the candidates hope for a win in the state that carries the nation’s largest student debt load, as the Ticket’s Liz Goodwin noted:

New Hampshire college students graduate with the highest average debt in the country: a staggering $31,048 for the class of 2010, according to a report by the Project on Student Debt. And tuition at the state’s public universities is among the highest in America, an average of more than $23,000 a year…Many of [the GOP candidates] have not yet gone into detail about their ideas for the country’s education system. But one issue unites most of the Republicans: getting the federal government out of education, which includes government loans to students.

In addition to having no solutions for record student debt loads, many of the GOP candidates want to dismantle the federal student loan program entirely, calling it an “absurdity” and a “total failure.” When President Obama announced a new plan to forgive some student loan debt, Newt Gingrich derided it as a “Ponzi scheme.”

The Roosevelt Institute’s Mike Konczal has some good ideas for grappling with student debt, including mass refinancing of all student loans “into the current low rates the financial sector enjoys.” But even in the state that is buried under the most student debt, the Republican candidates have provided little in terms of solutions.

NEWS FLASH

In Last Three Years, Student Debt Of Middle-Age Americans Grew By Nearly 50 Percent | An analysis by Reuters finds that “middle-aged borrowers are piling up student debt faster than any other age group,” with debt for those aged 35-49 increasing by nearly 50 percent in the last three years. The reason for this debt explosion is that “the tough economy has pushed people to seek mid-career training,” while more people are attending for-profit colleges, which push students to pile up larger debt loads. (HT: Jordan Weissmann)

Alyssa

Miley Cyrus, Messaging, And The Artsploitation Of The Occupy Movement

By Alyssa Rosenberg on Nov 28, 2011 at 2:53 pm

Maybe I should be less cynical, and we do love ourselves some “Party in the USA” here at ThinkProgress headquarters, but I’m not particularly moved by the sight of Miley Cyrus recycling a year-old anodyne girl power anthem and cutting it with a lot of footage from Occupy movements in a statement of radical chic solidarity:

I do think there’s some real value to Cyrus’ core audience seeing images of police brutality. But having a real context for that brutality would lift this video beyond generic teenaged stick-it-to-the-manism in a way that would be useful and specific. There are a lot of signs that show up in the footage: “Wall Street or War Street,” “Trust me—I’m a Banker,” “I Am the 99 percent,” “Separation of Corporation and State,” and “Don’t Destroy the American Dream.” Those slogans sound dandy, but they don’t actually explain why the people in the video or protesting, or why the police have been sanctioned to bring such violence to bear against them. Cyrus’ note accompanying the video, “This is Dedicated to the thousands of people who are standing up for what they believe in” is equally meaningless, a non-endorsement endorsement that can’t possibly rattle the cage at Hollywood Records.

I feel like such a scold about all of this, but Cyrus’s core fan group is exactly at the age where they’re about to start having adult experiences with debt and income inequality. If they’re applying for college, they may be taking on loans that they can never discharge in bankruptcy. If they’re getting their first credit cards, it might be good for them to know a thing or two about interest rates. A specific endorsement of the goals of the 99 Percent Movement might be uncomfortable for Cyrus, who was born into the 1 percent and has solidified her position there by making herself seem like a consumption priority for young girls. But if Cyrus is genuinely in invested not merely in the idea that free speech is good, but in the belief that widening income inequality is deeply damaging, there are more creative and meaningful things she can do than dust off her back catalogue and slap an Occupy sticker on it.

Special Topic

Why We Occupy: Because College Used To Be Virtually Free In California

By Zaid Jilani on Nov 28, 2011 at 12:45 pm

Today, students at four different University of California (UC) campuses will engage in marches, strikes, and other actions intended to protest against plans to possibly raise tuition even further at state schools. In preparation for the protests, the UC Board of Regents has decided to meet at several different locations and hold the meeting via teleconference.

In protesting against even further tuition hikes, these students are not demanding a utopian world, as many of their critics may claim. In fact, for many years — dating back to the 19th century — California schools did not even charge tuition. Rather, students would be required to pay a few small student fees at most. When Gov. Ronald Reagan (R) took office, he insisted on imposing a new fee that would later become synonymous with tuition, thus ending California’s tradition of providing virtually free education to qualified college students. Since then, tuition has slowly skyrocketed, eclipsing the ability of many middle class Californians to get an affordable education.

The blog Dr. Housing Bubble visualizes the massive spike in college tuition that has occurred over the years, comparing it to the collapse of the housing bubble and showing how tuition has gone up even as one of Americans’ main sources of wealth was decimated:

With annual UC tuition already reaching $12,192 with possible further hikes on the horizon, it isn’t at all surprising that students are taking to the streets and their campuses to demand an affordable education. After all, more than a century ago, college was virtually free in the state, when it was far less prosperous. The real question is, why aren’t even more students out protesting?

Economy

GOP Candidates: Federal Student Loans Are ‘An Absurdity,’ ‘A Total Failure’

By Pat Garofalo on Nov 10, 2011 at 9:30 am

Outstanding student loan debt is projected this year to hit $1 trillion for the first time, while the average college student now graduates with more than $25,000 in debt. Federal student aid has failed to keep pace with the skyrocketing cost of tuition, even as the U.S.’s educational attainment begins to trail that of other developed nations.

According to the Lumina Foundation, by 2025, the U.S. will be short 16 million college educated workers. But according to the GOP presidential candidates, who took part in yet another primary debate last night, the government should deal with these problems by doing away with federal student loans:

REP. RON PAUL (R-TX): The policy of student loans is a total failure. I mean, a trillion dollars of debt, and it’s going to be dumped on the taxpayer?…There’s nothing more dramatically failing than that program…We should get rid of the loan programs.

NEWT GINGRICH: It’s an absurdity. What does it do? It expands the ability of students to stay in college longer because they don’t see the cost.

GOV. RICK PERRY (R-TX): I don’t think the federal government should be in the business of paying for programs and building up huge debt out there.

Watch a compilation:

As ThinkProgress’ Zaid Jilani has explained, “millions of Americans have benefited from the ability to go to school thanks to the federal student lending programs first pioneered in the 1960′s and 1970′s. According to data from the Department of Education, 9,020,465 Americans utilized the federally subsidized student loan program during the last academic year.” Blaming federal aid for rising tuition is a favorite conservative canard, with little basis in reality.

As for the problem of student loan debt, the Roosevelt Institute’s Mike Konczal has some good ideas here, including mass refinancing of all student loans “into the current low rates the financial sector enjoys.” Instead of embracing something along those lines — and helping students gain an education that for more and more people is becoming a heavier and heavier burden — the GOP wants to throw the student loan program out altogether and leave students to the mercy of the banks.

Economy

House Education Commitee Chair Calls Obama’s Student Loan Plan ‘A Mistake’: ‘We Don’t Have The Money’

By Tanya Somanader on Oct 31, 2011 at 12:40 pm

House Education Committee Chairman John Kline (MN)

American college students will hit a milestone this year by having a record $1 trillion in student loan debt. Aware of the burden, President Obama announced a plan to help college students reduce their loan debt by consolidating their loans and lowering the maximum required loan payment from 15 percent of a student’s income to 10 percent. Debt would be forgiven after 20 years, instead of 25. The plan could help millions of students by lowering monthly payments by hundreds of dollars.

Naturally, Republican lawmakers are slamming the plan. Former House Speaker Newt Gingrich called it a “Ponzi scheme.” Rep. Michele Bachmann (MN) called it an “abuse of power” that creates a “moral hazard.”

House Education Committee Chairman John Kline (R-MN), meanwhile, insisted that the plan actually “means more debt for students” because it encourages “more borrowing.” Kline continued his rant this morning on Fox and Friends, calling the executive order “a mistake” that will only “encourage” borrowing that leaves “taxpayers holding the bag”:

KLINE: This is a mistake. It’s very confusing. I’ve talked to a lot of people about what the president proposal is, it’s very difficult to figure out. Some of the changes are going to affect a very small group of students, some of them are going to affect a larger group of students. All of it we’ll encourage more borrowing, I’m afraid, and leave taxpayers holding the bag. [...]

We’ve seen the cost of college go up and up and up. Tuition and fees. The colleges and universities are going to have to face the fact that there is not an endless supply of money coming from state and federal governments. They’re going to have to look at their own operating costs and start to curtail the costs of going to college. We simply can’t keep providing money from the federal government in the form of subsidized or actual loans and Pell grants when we don’t have the money.

Watch it:

Kline noted that the executive order is “technically legal, but it is a stretch for him to do this and it was not the intent of Congress to do this at this time.” But the fact that Republicans don’t wish to address the record amount of student loan debt should not be surprising.

As TP Economy editor Pat Garofalo notes, the GOP “vigorously opposed reforms that stopped billions of federal dollars from going to banks to act as unnecessary middlemen in the federal student loan program.” They called the elimination of corporate welfare a “Washington takeover” of the industry. Pair that with Republcians’ callous cuts to the Pell Grant program and it’s easy to see that, whatever Kline and the GOP intend to do, it has nothing to do with helping students.

Special Topic

Sallie Mae Locks Out Student Protesters As Occupy DC Marches Against Skyrocketing Student Debt

By Lee Fang and Zaid Jilani on Oct 28, 2011 at 6:24 pm

This afternoon, a group of about seventy-five students mobilized at the OccupyDC camp at McPherson Square to raise the issue of crushing student debt. The average student, facing grim job prospects in the current economy, is graduating with at least $24,000 of debt.

The students and recent graduates then marched several blocks through DC to the lobbying headquarters of student loan giant Sallie Mae. As students posted letters and stories about their own debt on the walls of the building, a phalanx of police officers and security guards blocked anyone from entering the building.

The demonstrators, who had planned to voice their grievances in the lobby of the building, began chanting “if we had money, they’d let us in!” As the crowd swelled outside the Sallie Mae office at 7th Street and Pennsylvanie Avenue, security officers continued to block protesters from entering. The peaceful crowd said they only wanted to air their grievances with a representative from Sallie Mae, but were rebuffed. Watch it:

The demonstrators formed a human chain and said they didn’t want to see people leave without talking to them about student debt. Eventually, police escorted employees out of the building, and demonstrators verbally warned eachother against the use of any violence or harassment against Sallie Mae staffers. Watch the employees exit under police escort:

Sallie Mae, the nation’s largest student lender, has spent millions lobbying Congress to continue massive government subsidies to private lenders. Worse, Sallie Mae has lobbied aggressively, using money received from students, to allow private lenders to use predatory practices, including hidden fees.

ThinkProgress Intern Rebecca Leber contributed to this report.

Economy

Bachmann: Obama’s Student Loan Plan Is An ‘Abuse Of Power’ That Creates ‘Moral Hazard’

By Travis Waldron on Oct 28, 2011 at 5:55 pm

Presidential candidate and Minnesota Rep. Michele Bachmann (R) joined a chorus of Republicans in opposing President Obama’s proposal to help college students and graduates get out from under crushing student loan debt. She followed former Speaker Newt Gingrich (R) and pizza magnate Herman Cain (R) in announcing her opposition last night at an education forum hosted by News Corporation and the College Board in New York.

Gingrich called the plan a “Ponzi scheme,” while Cain claimed the student loan industry should be managed by the states. Bachmann, however, took a different stand, saying Obama’s plan was an “abuse of power” that would create a “moral hazard” for the nation’s college students:

“I believe it is abuse of power from the executive to impose via an executive order a wholesale change in the student loan,” Bachmann, a Minnesota congresswoman, said during an education forum in New York put on by The College Board and News Corp.

Bachmann said the change creates a “moral hazard” when it comes to student debt.

“There is a morality in keeping our financial promises, and I don’t think we should push that off onto the taxpayer,” she said. “The individual needs to repay and be responsible for repaying their student loan debt.”

The “moral hazard” that would result in not keeping “our financial promises,” however, isn’t based on the actual plan Obama proposed, since it forgives very little debt that students owe, and only then after borrowers have been paying their loans for twenty years. (The old requirement for forgiveness eligibility was 25 years.) Mostly, the plan lowers monthly payments — by hundreds of dollars for many students — by putting a cap on the amount that must be paid back each month.

As for it being an abuse of power, Obama’s executive order doesn’t create a “wholesale change” in student loans, it merely accelerates the implementation of a law passed by Congress last year, putting it into effect in 2012 instead of 2014.

Instead of providing a credible, truthful reason to oppose the plan, Bachmann has chosen to join her Republican colleagues in their continuing effort to make it harder for low- and middle-income Americans to go to college. Student loan debt is expected to top $1 trillion this year and tuition costs are rising across the country, but the GOP’s method of addressing such problems includes cutting billions in funding for Pell Grants and opposing multiple student loan reforms.

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