America’s system of higher education has always been one of shared responsibility: students, families, states, and the federal government all taking part in funding a college education. Unfortunately, we are witnessing a realignment of each partner’s share of the costs of college. States are contributing less while students and their families are shouldering a heavier burden, financed largely through federally backed loans. Student debt has surpassed credit card debt in the U.S. and reached the $1 trillion mark, a nearly 50% increase from four years ago. As I discovered in my recent Senate Committee investigation, more than a quarter of federal financial aid goes to for-profit colleges, yet nearly 50 percent of these students drop out within four months—a development that calls for a closer look at the standards to which we hold schools that receive federal aid.
As we reauthorize the Higher Education Act in the next Congress, we must make college more affordable, but more importantly, we must empower students and families by making the process of selecting a college easier and more transparent—so students know exactly what expenses to expect. While many colleges are trying to keep costs down, many more are stuck in a “business as usual” mode, which is neither sustainable nor desirable.
Some colleges like my alma mater, Iowa State University, are investing in earlier and more effective counseling so that families can start planning from the first year of college and know their financing and repayment options. We must invest in work-study programs and help students, while they are still in school, with smart budgeting. Finally, we must expand the number of borrowers who are aware of the government’s income-based repayment plan, which lets many students cap their monthly payments at 10% or 15% of their discretionary income.
Education is the key to success in America. It is critical to a strong middle class and remains one of the best investments for both individuals and the nation. For America to remain competitive, we must tackle the college affordability crisis head on and ensure that student loan debt does not become the next housing bubble.
Harkin is a U.S. Senator from Iowa, and Chairman of the Health, Education, Labor and Pensions Committee.