Thursday, January 26, 2012

Our View: State of the Union


On Tuesday night, President Barack Obama addressed the nation during his annual State of the Union address.  He stressed education as an important piece in the puzzle to reviving the economy and creating jobs. 

To watch President Obama's remarks on education please click here.

The transcript of the section related to higher education is below:

"When kids do graduate, the most daunting challenge can be the cost of college. At a time when Americans owe more in tuition debt than credit card debt, this Congress needs to stop the interest rates on student loans from doubling in July. Extend the tuition tax credit we started that saves middle-class families thousands of dollars. And give more young people the chance to earn their way through college by doubling the number of work-study jobs in the next five years.

Of course, it’s not enough for us to increase student aid. We can’t just keep subsidizing skyrocketing tuition; we’ll run out of money. States also need to do their part, by making higher education a higher priority in their budgets. And colleges and universities have to do their part by working to keep costs down. Recently, I spoke with a group of college presidents who’ve done just that. Some schools re-design courses to help students finish more quickly. Some use better technology. The point is, it’s possible. So let me put colleges and universities on notice: If you can’t stop tuition from going up, the funding you get from taxpayers will go down. Higher education can’t be a luxury – it’s an economic imperative that every family in America should be able to afford.

Let’s also remember that hundreds of thousands of talented, hardworking students in this country face another challenge: The fact that they aren’t yet American citizens. Many were brought here as small children, are American through and through, yet they live every day with the threat of deportation. Others came more recently, to study business and science and engineering, but as soon as they get their degree, we send them home to invent new products and create new jobs somewhere else. 

That doesn’t make sense."

The President's remarks on the substantial amount of student loan debt are spot on.  Students across the United States and right here in Minnesota have more debt from student loans than they do from anything else, credit cards included.  For this reason, we are thankful the President mentioned keeping the federal loan interest rate at the current level of 3.4%.  If Congress does not take action the interest rate will double to 6.8% in July. According to a statement from Rich Williams, a higher education advocate for US PIRG, "If Congress does nothing, borrowers who take out the maximum $23,000 in subsidized student loans will see their interest balloon to an additional $5,200 over a 10-year repayment period and $11,300 over a 20-year repayment period."  If you are interested in getting involved in the efforts to lobby congress to maintain the 3.4% interest rate please email Jonathan Bohn, Director of Government Relations at govrelations@msusa.org

Later in his speech, the President praised Universities striving to change the way they do business to keep costs down.  Our campuses have experienced this through reorganization, recalibration and simply changing how programs are offered.  The MnSCU system will see more of this innovative change as the newly adopted strategic framework comes to fruition.  Gone are the days when our Universities could operate at the status quo.  However, many of these reorganizing efforts have come as a result of decreasing appropriations from the state of Minnesota.  Students in the MnSCU system have gone from covering under 40% of their tuition, with the rest coming from the state, to currently funding over 60%.  At the same time, tuition has increased over 100% in the last 10 years.  Though the President's remarks leave many questions unanswered, we look forward to seeing progress on these issues in the coming year. 

MSUSA State Chair 
Amanda Bardonner


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