Senate urges loan reform
Written by Maggie Kern|
March 29, 2012
Majority Whip Richard J. Durbin, D-Illinois, took to the floor of the U.S. Senate to challenge student loan policies Tuesday.
In an attempt to restructure how higher education loans will operate, Durbin proposed a bill that would forgive student debt if the person holding the loans entered bankruptcy at any point in time.
Durbin expressed his discontent with the loan process which financially straps struggling students to a life of debt, and ultimately has negative effects on the economy. Durbin also called out Congress for largely ignoring the predicament of many college students.
Both students and administrators agreed that loans recently have become a fact of life for many students at the College of William and Mary.
Jennifer Meier, assistant director of the Financial Aid Office, counsels students who rely on student loans to attend the College.
“For some students, loans are a necessary thing for them to come to school here — especially for out-of-state students,” Meier said. “It’s a shame that college is no longer affordable. It’s become something that’s really blown out of proportion.”
“To attend an elite college in this country, it’s almost a necessity to take out student loans,” Chris Salvi ’12, who uses loans to pay for tuition at the College, said.
Others take a more positive outlook on loans.
“While I am personally not on student loans, I’m all for student loans that make it possible for a lot of people to go to this school that otherwise could not afford to do so,” Megan Burns ’12 said.
Some students feel ambivalent about the implications of absolving student debt in the case of bankruptcy.
“There’s a bit of a moral hazard with the idea of student loans being absolved. It almost gives an incentive for bankruptcy,” Salvi said. “However, certain restrictions and [forgiveness] make sense.”
Burns also found the idea of pardoning debt hazardous.
“I don’t think that it’s fiscally sustainable for the government to absolve students of their loans,” Burns said. “A better practice would be to ensure on-campus employment or a type of work-study arrangement to help the students pay off their loans.”
Burns also questioned whether the idea of debt forgiveness for student loans would be politically palatable given the current economic environment.
“I don’t think a proposition like that would go over well with the population, either,” Burns said. “That’s thousands upon thousands of dollars that now become the burden of the American taxpayer. … How does money that helps a student come back to [the American taxpayer]?”
Salvi mused that the burden of paying for higher education should fall on the shoulders of the colleges rather than on the government itself.
“There needs to be more pressure on colleges to reduce debts — you can reduce costs without sacrificing education,” Salvi said.