College isn’t free. It’s expensive, and the price tag is steadily climbing.
It’s so expensive, in fact, that over 12 million U.S. students (60 percent of all attendees) use loans annually to pay for school, according to The Chronicle of Higher Education. But some potential borrowers are finally getting a break.
Last month, the Department of Education said it plans to make loans more accessible for both students and parents with poor credit. The change would make 370,000 more students eligible for government loans.
Currently, many young students don’t meet eligibility requirements for government loans because they don’t have adequate credit history and/or are in debt. This leaves this kind of student unable to continue on to a four-year university because of the exceedingly high cost. Some students are even forced to take a leave of absence from school for the sole purpose of building credit so they can resume their education.
With current credit regulations, those with high amounts of debt applying for loans from the government’s direct loan program are automatically rejected.
The new policy would give applicants with up to $2,085 in debt a chance to receive loans, the Associated Press reports.
According to the Federal Reserve Board of New York, 37 million students have outstanding student loans. Additionally, the Consumer Finance Protection Bureau reports $864 billion nationwide in outstanding federal student loan debt.
With that much borrowed money, it is unrealistic to think that college students would qualify for a loan under these incredibly obsolete regulations, originally enforced in 1994.
The proposed new rules would also shorten the length of time student debt history is taken into account for eligibility. Currently, credit history is observed for the last five years while the new policies would lessen it to two. More serious credit issues like bankruptcy and foreclosure would also be included in the shortened credit history window.
It’s ridiculous that it has taken the Department of Education 20 years to update a policy that affects so many Americans and the future of the country. Plenty of time has passed to see amendments in this area, especially since more students than ever are choosing to continue their education beyond high school. College enrollment rates raised 43 percent between 1991 and 2011, according to a report by the National Center for Education Statistics. The rules now in place are archaic for the current volume of students.
Another issue the Department of Education seemed to have overlooked for two entire decades is the dramatic increase in college tuition. In 1991, the average tuition cost for both four-year and two-year colleges was around $11,600. In 2011, the cost had climbed to $19,000, according to another NCES report.
Having the ability to obtain loans is an improvement, but the country’s education system still needs work. The average student loan debt for 2011 college graduates was $26,600. But these proposed changes are definitely progress.
In November, the Department of Education will finalize policy changes, which should take effect in fall 2015.
Making over a third of a million citizens eligible for student loans is one step closer to making higher education accessible to all, not just a privilege for a few.
