Why Trump’s Proposed Student Loan Limits are a Good First Step
For decades, we’ve watched tuition skyrocket. When student loan funding were guaranteed by the US government, the country’s higher education system decided to rob that piggy bank. President Trump has decided that enough was enough and proposed limiting the amount one can borrow from student loans. He also wants to cap loan minimum repayments 12.5 percent of one’s discretionary income. His critics hate this, but there’s something they’re not getting.
A red line isn’t always good, but it’s needed
We’ve often heard that if you draw a line, those being limited will walk right up to it. That’s how it usually works with kids, governments, and that’s going to be how it works with higher education. This doesn’t sound like a good thing, but let’s take a step back and think about what we’ve been dealing with.
Since the ’70s, the University of Oregon has increased tuition just about every year. During that decade, tuition was $541 per year. Today, it’s more than $10,000 per year and still rising. As I’m sure you’ve noticed, this isn’t unique to my alma mater. For current college students and recent graduates, it feels like there’s no end to what their universities are charging in tuition. That’s largely because there’s nothing holding them back. However, it’s more than pure greed making them do this.
A look at professor salaries
At the University of Oregon, the average professor’s salary was $106,900 per year. That means for every 1 percent increase in faculty pay (all 1,274 of them), the school’s expenses increase by $1.36 million per year. I’m sure plenty of professors receive a 2 percent raise each year. However, the issue here is that the university has recently been raising tuition between 5 and 10 percent, and don’t forget the public pension crisis in Oregon.
Notice how in the ’70s it used to be $541 and now it’s more than $10,000? In case you haven’t caught on yet, tuition has increased without any foreseeable limit. President Trump wants to tackle that issue. First, we needed to draw a red line and that starts with capping federal loans.
University priorities don’t always match student priorities
The University of Oregon is a great example of unwise use of funds. The university is known for going into debt to renovate and expand campus, relying on students to foot the bill. When I was there, students were vocal about wanting cheaper textbooks, food that didn’t cost an arm and a leg, and more investment in making campus safer at night.
If Congress actually listens to President Trump and passes meaningful student loan reform, schools like the University of Oregon might listen. After all, the college admissions scandal proved that most parents are willing to spend whatever they need to for their kids to get a “good education.” If colleges and universities know this — and they charge more to capture wealthier families — then it would stand to reason that poorer students would have to pay more over time as well. Pair that with the unfettered rise in tuition and you’ve got yourself a ticking time bomb in the economy later.
