Americans now owe more on students loans than credit cards.
That stunning bit of information was part of an article by Rebecca D. O'Brien of The Hackensack, N.J., Record on the soaring cost of college that was published in the U-B last week.
That and other hard, cold facts about the mounting debt created by student loans feel like a kick in the gut.
Last year, new student loans exceeded $100 billion nationwide for the first time, O'Brien wrote. Total loans outstanding will exceed $1 trillion this year. Students today borrow twice what they did just a decade ago.
In the meantime, she added, more and more American borrowers are defaulting on their federal student loans. The national two-year default rate rose to 8.8 percent in fiscal 2009, from 7 percent in 2008, according to figures released last month by the Department of Education.
It is clear, at least to us, a crisis is on the horizon.
President Obama last week announced he plans on taking new executive actions aimed at providing some relief. Obama‘s plan would allow millions of student loan recipients to lower their payments and consolidate their loans.
While making it easier to grapple with the growing debt associated with getting a college education might be somewhat of a relief to many, lower interest rates is only a Band-Aid.
The cause of the problem - tuition increases that go up by 10 percent or more year after year - must be addressed.
Washington state has seen its university and college tuitions rise even faster than the rest of the nation. The past two years, for example, the tuition has gone up 14 percent a year. Sadly, the increases are going to continue.
State government is so cash-strapped the Legislature has chosen to reduce taxpayer subsidies for public college and universities year after year. So, to backfill the hole created by the reduction in state spending, the schools have been granted the power to raise tuitions.
Unfortunately, fewer dollars are available for financial aid and grants. The higher tuition is gobbling up more rapidly the money available. At the same time, the recession has reduced the amount available for aid.
Where will this end?
Well, it could resemble the crash in the housing market when millions of Americans default on their loans.
We believe state governments have an obligation to establish a minimum public funding threshold for all state universities and colleges. Lawmakers need to accept their responsibility as stewards of public colleges and make sure they are adequately funded and affordable to all.
The soaring cost of tuition cannot be sustained.
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