Crushing Debt
Still, there’s no question some students end up with crushing debt.
The child of a retail clerk and grocery-store manager, Toni Biggert said she didn’t understand financial aid, compound interest, or even that she could shop around for cheaper tuition. The result: Now wrapping up her master’s degree at the University of Toledo, she is struggling to repay more than $100,000 in federal and private student loans on her $36,000-a- year salary as a sixth-grade teacher.
“It’s very hard to know that I went about it the wrong way,” said Biggert, 28, who lives in Oak Harbor, Ohio, an hour southeast of Toledo. “I had no access to knowledge. I feel like I was so blind.’”
Citing privacy rules, the University of Toledo declined to discuss Biggert’s debt. Since she began college, the school has improved its counseling about loans, said Sherri Jiannuzzi, an assistant director for financial aid.
Student Shopping
With stories like Biggert’s in mind, President Barack Obama and members of Congress are expected to propose cost-control measures when lawmakers consider reauthorizing the main federal law governing higher education as soon as next year. Senators Al Franken, a Democrat from Minnesota and Charles Grassley, a Republican co-sponsor from Iowa, would require that colleges use a standard financial-aid award letter, so students can easily compare offers.
Currently, as Bloomberg News reported in April, some schools give students the impression that federal loans are scholarships -- a practice Warren acknowledges is “just this side of deceptive.” Colleges are objecting to the volume of disclosures that the bill would require.
In another proposal, Obama wants to use Perkins loans, a program for low-income families, as a lever for keeping tuitions affordable. The administration’s plan would increase Perkins to $8.5 billion annually from $1 billion.
Punishing Colleges