Last night, President Obama took to the Late Night stage to deliver his call to action to prevent interest rates on federal student loans from doubling in July...slow jam style. He focused his message on preserving college access and affordability and the threat posed to each by rising student loan costs. While more and more students are relying on student loans to cover a growing portion of their college expenses, this highlights a larger problem with college financing and raises the question: if the federal government is investing in access to a college education, are there better ways to do that than by subsidizing debt?
In a great piece recently published by my colleague Justin King in GOOD magazine, helping families build savings on the front end leads to much better outcomes than building debt on the back end. Here's why: savings not only expand the tools that families have to pay for college, which is especially critical for low-income families who are most likely to find college unaffordable, and therefore, inaccessible, but they help build the expectations that college is in reach and cultivates other college-bound behaviors that reinforce this goal as well.
One option to help all kids, regardless of their financial situations, save for college is by establishing an account for every child at birth, seed that account with a little investment to get the account growing (this is how you make interest rates work FOR you), and offer to match the contributions of the families who need the most help building that balance. The ASPIRE Act would make this happen.
So, this is what I would have liked to have seen President Obama jammin' about, making a structural change in how students pay for college and expanding the scope of students who pursue a degree in the process, not just playing in the margins. Regardless of the message, you can't argue with the delivery. Check it out for yourself and think how much better it still could have been if he'd jammed about ASPIRE....
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