The Massa campaign has posted the education plan discussed at this morning's press conference. It has three major components:
- Replace privately-funded student loans with low-interest, federally-financed student loans with low interest rates.
- Forgive student loans of students who perform five years of a public-service job, such as teaching, firefighting, policing, social work or nursing.
- Create incubator projects similar to those in the Research Triangle area of North Carolina, or in Boston, to grow local business.
Comments
Not sure I like his plan.
1. Are items 1 and 2 retroactive for students who are struggling to pay their loans off now? If not, why not? Will they just give the colleges another reason to increase their tuition fees?
2. I don't agree at all with item number 2. Why should these types of employees be given preference over others? Their pay may be lower (and I'm not sure about that) but their benefits and job security make up for it. Is this sucking up to the unions or what?
1. I don't know. I assume not since making it retroactive increases complexity and expense.
I don't know why colleges would use the presence of a slightly different loan program to increase tuition. The real change in Massa's (1) is on the student end -- they'll see lower interest. Colleges might see slightly higher demand, but I can't believe the change would be anything but slight.
2. There aren't a lot of details on this. I would hope that the "public service" aspect means that the forgiveness would happen if the student took a job in an underserved area.
As for the list, the one that makes the most sense to me is nursing. There aren't enough nurses, and the baby boomers are going to stretch our medical resources to the breaking point without a concerted effort to train more technical health professionals.
Speaking of nurses
I know there is no direct connect between the 29th and Tom Golisano's Responsible New York initiative, but he named nurses as a special interest group:
"These groups have narrow goals and represent a small class of people -- real estate, health care, nurses, public employees and so on"
in the Elmira Star-Gazette
http://www.stargazette.com/apps/pbcs.dll/article?AID=/20080718/OPINION03...
Seems like Golisano and Massa aren't on the same page
Golisano's saying that nurses, along with the other groups mentioned, have organizations and lobbying groups that help them achieve their legislative goals. Which is true.
That's different from saying that nurses shouldn't be part of a public-service program where they can work off their college loans.
These are two different things. Nurses might be good at lobbying yet still deserve to have their educational loans forgiven if they work in an underserved area for 5 years.
In general, Golisano is focusing on NY State gov't, and Massa is focusing in federal policy, so it's a bit of apples and oranges.
Increased tuition costs are driven by every penny the federal government forks over in low interest rates, grants, guaranteed loans, etc.
"A good rule of thumb is that tuition rates will increase at about twice the general inflation rate"
http://www.finaid.org/savings/tuition-inflation.phtml
What other industry could get away with this. Colleges couldn't either without the help of the feds?
So, my feeling is in the long run students won't save anything by lower interest rates as their tuition will rise due to the easier access to money.
There's one other factor you're leaving out -- limits on the amounts students can borrow. All federally-guaranteed student loans have term (or semester) limits and lifetime borrowing limits. As long as the term/semester limits are not changed, the amount of money available to each student will not change, and that won't lead to higher tuition.
When I said above that there might be a slight change in demand, what I meant was that the lower interest rates might allow a few more students to enter college and therefore we might get a slight uptick in demand. But it would be slight.
As for your general point, I agree that the easy availability of student loans, scholarships and grants tends to make it easier for colleges to raise tuition. But the change that Massa is backing won't make that problem any worse.
"limits on the amounts students can borrow. All federally-guaranteed student loans have term (or semester) limits and lifetime borrowing limits."
Unfortunately I would bet almost anything that these limits will be relaxed.
After further thought, it appears to me that Massa is just representing the special interest groups he says he opposes.