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Tuesday, March 6, 2012

Student Loan Debt & Ron Paul




In response to the article titled, “Why Ron Paul is wrong for students” I would like to thank the author for addressing her concerns; however, I would like to provide an opposing argument.

Although Ron Paul promotes limited federal government involvement, he understands that many people are dependent on government programs. The Paul campaign released this statement about federal student aid [1]:

“To recognize that we are bankrupt and we must have drastic change in this country is not to say that certain programs Americans have come to rely on will be gotten rid of overnight. Paul is certainly saying no such thing. But the costs must be addressed—and not simply what the government spends, but the massive debt incurred by those in this country who just want a college education. To be sure, the countless Americans who are now slaves to education-related debt can tell you there are substantial problems with our current system. Ron Paul simply wants to fix them.”

Therefore, I would like to explain Ron Paul’s arguments about the problems with the current system in place. First of all, inflation of college tuition (the rate of the rising cost) on its own has “outpaced” other goods since the 1990s. This means that college has become more expensive than other fundamental goods and services expended, such as housing, energy, and health care [2]. Specifically, College Board figures show that college tuition inflation is 2.67% higher than general inflation [3]. Why is college tuition overinflated though? The author acknowledges that federal aid contributes to the rise in tuition but does not elaborate on the reason. Data suggests that schools increase prices based on the amount of grants they receive in aid. For example, a school would raise tuition $66 for every $100 they receive in student aid. More support was demonstrated in a collaborative study conducted at both George Washington University and Harvard, which found that for-profit schools that were eligible for Title IV programs (grants, loans and work-study) charged tuition 75% higher than for-profit schools that were not eligible for Title IV programs. In other words, the for-profit schools receiving federal aid raised tuition at a much higher rate than for-profit schools not receiving federal aid [4]. Therefore, it appears that federal aid is taking away the incentive for schools to keep tuition low and affordable for students.

In a free market environment, competition would help reduce prices so students would be able to afford tuition on their own. Prior to federal government involvement in higher education, tuition was something students could carefully consider before deciding on a certain college. Therefore, colleges had to make sure they charged reasonable and affordable tuition rates in order to remain competitive. It seems strange now, but students used to be able to afford their tuition without help from parents or the government. How was this possible? Well, one example is that they had the option of working a summer job to save up for fall and spring tuition. College used to be that inexpensive before the Higher Education Act of 1965!

Nowadays, paying college tuition without student loans seems impossible. Aside from needing government assistance, we do not have the option of going to college at our own pace. For example, financial aid requires students to attend full time in order to receive grants, loans or work-study benefits. Students are faced with a busy, stressful schedule if they also work a full-time job. Financial aid’s six-month grace period is another factor I find to be constraining. The six-month grace period does not provide students the option of taking off more than six months from school because they would be required to begin repaying their loans. There are three exceptions when one cannot find a job after graduation or if he/she takes a break from school: forbearance, deferment, or going back to school. I understand the rules are in place for a reason (e.g., prevent people from taking advantage of the system) but I would like to point out how these rules make college a bit more complicated than it should be. Financial aid restricts our ability to decide the amount of hours we want to take and our ability to take off more than a semester for whatever reason (e.g., family emergency). I speak from experience. I had to push back my undergraduate graduation date to make sure I did not have a six month gap (to preserve my grace period) between undergraduate and graduate school. Therefore, I took unnecessary classes to comply with full-time financial aid status and incurred more student loan debt.   

Moreover, the author said she was thinking of the “here and now” but the truth is that our present reality consists of hyperinflated college tuition, 1 trillion dollars [$1,000,000,000,000] worth of student loan debt and no jobs. Student loan debt is something U.S. taxpayers cannot sustain or afford to bail out. Perhaps our generation will be called upon to make sacrifices. These sacrifices will not be in vain though since they will lead us towards restoring economic prosperity. If previous generations had taken future generations (our generation) into consideration, we would probably not be in this mess. I believe that accepting things for what they are is better than having colossal student loan debt and a degree in a weak job market. By accepting the reality of our situation we have the ability to restore our country for future generations. Nelson Mandela said, “Sometimes it falls upon a generation to be great. [We] can be that great generation." I strongly believe we can have a positive impact on the direction of our country by bringing awareness to the flaws in the higher education funding system.

If you still believe it is not in our best interest to get rid of federal student aid, I do not blame you. Our generation grew up in a time of government assistance. Yet, I do feel it is our duty to investigate what caused the problems we face today. Why are we in an economic crisis? Why are we fighting unconstitutional wars? Why are we sending foreign aid to other countries during a recession when the money could do so much at home? What role does the Federal Reserve play in devaluing our currency and exacerbating inflation? What is the inflation tax? These are but a few of the questions we should be investigating. Ron Paul addresses these issues. He speaks the truth and the truth is not always pretty or easy to hear.

The author believes it is “obvious” Dr. Ron Paul has never been in our shoes. This tells me she is comfortable with relying on her preconceived opinions. It is actually no secret Ron Paul was born to a poor family during the Great Depression. Dr. Paul also paid his own way through college and medical school. It seems to me he is well aware of the challenges and difficulties that come with seeking higher education.

Moreover, I vehemently disagree with the author when she says that any student who votes for Ron Paul is shooting themselves in the foot. I am a student and I have come to support Ron Paul by reading his books and investigating his policies. Ron Paul’s platform must be looked at holistically in order to appreciate its fairness and practicality. I understand how a cursory inspection of the single issue of federal student aid can turn off some individuals but I would like to point out that Ron Paul is more concerned with fixing our foreign and monetary policies than cutting federal student aid. You can view details about his Plan to Restore American at ronpaul2012.com [5].

Personally, I was first drawn to Ron Paul for his peaceful, diplomatic foreign policy. His respect for the Constitution and 20-year record in Washington indicate he would never start an unconstitutional war. This is important to me because unconstitutional wars have cost us thousands of lives and trillions of dollars in the past decade alone. As students and citizens, we should be concerned about these types of issues; college is a choice but war is being forced on citizens even when the reasons for the wars are lies (e.g., weapons of mass destruction that were never found in Iraq). I would also like to point out that Ron Paul is the only presidential candidate that has spoken out against the newest provision to the National Defense Authorization Act (NDAA) [6], which disregards some of the basic principles of a free society: habeas corpus and due process of law (Subtitle D, Section 1021).  Yes, President Obama signed a waiver for U.S. Citizens, but shouldn’t we have all have been a bit more concerned about the very fact that our constitutional rights were usurped with the stroke of a pen?  I urge all students and citizens to do their own research before deciding whether they will vote for a candidate or not. Thank you for your time.


[1] “Ron Paul is Not ‘Ending’ Student Loans” via http://www.ronpaul2012.com/2011/10/24/ron-paul-is-not-ending-student-loans/





[6] National Defense Authorization Act (NDAA) www.gpo.gov/fdsys/pkg/BILLS.../pdf/BILLS-112hr1540enr.pdf

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