Though undergraduate students who benefit from a federal grant program came out on top when President Barack Obama signed a last-minute deal to raise the national debt ceiling Tuesday afternoon, graduate and professional students throughout the country will start owing more on their loans.
The debt ceiling deal preserves the maximum award for the federally funded Pell Grant program but will eliminate the interest subsidy for a government-subsidized loan program for graduate and professional students beginning in July 2012.
Obama signed the deal immediately following a 74-26 vote in the U.S. Senate, raising the nation’s borrowing limit to avoid a debt default and reducing deficits by at least $2.1 trillion over a decade.
As a part of that deal — the Budget Control Act of 2011 — the Pell Grant program was given an additional $17 billion to maintain its maximum award amount of $5,550 at the cost of eliminating the interest subsidy for the Stafford graduate loan program. Students who receive Stafford loans will need to begin paying interest on their loans while still in school or let it accumulate.
Additionally, beginning in July of 2012, the act eliminates loan repayment incentives for students who make their payments on time. According to a Congressional Budget Office analysis of the act, it is estimated that the changes would reduce direct spending by $9.6 billion over the 2012-16 period and $21.6 billion over the 2012-21 period.
Currently, Stafford loan borrowers who make 12 consecutive on-time payments are eligible for a rebate of 0.5 percent of the loan amount, which is applied to the 1 percent repayment fee.
Approximately 40 percent of all UC undergraduates are eligible for Pell Grants — which offer up to $5,550 in aid that does not have to be repaid — and received a total of $321 million this past year.
Graduate students can currently borrow as much as $20,500 a year in federal Stafford loans. That level will be raised to make up for the extra amount students will have to spend to make up for the subsidies, according to the CBO analysis.
“As appreciative as we are that Pell has been preserved this time around, we move forward with caution knowing that the fight is not over, that the future stability of Pell and other crucial higher education programs is still at stake,” said United States Student Association President Victor Sanchez in a statement. “It’s without a doubt that the victory we do come away with is a result of the hard work of students from around the nation, putting this issue at the forefront of the debate.”
According to estimates from the CBO analysis, the overall changes in direct spending for education programs would, on net, increase direct spending by $7.4 billion over the 2012-16 period but reduce direct spending by $4.6 billion over the 2012-21 period.
However, Obama said in a statement following the bill’s enactment that this is just the “first step to ensuring that as a nation we live within our means.”
“I’ve said it before; I will say it again: We can’t balance the budget on the backs of the very people who have borne the biggest brunt of this recession,” he said in the statement. “We can’t make it tougher for young people to go to college … or ask scientists to give up on promising medical research because we couldn’t close a tax shelter for the most fortunate among us. Everyone is going to have to chip in.”
Allie Bidwell is the news editor.
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It doesn’t really matter who’s in office with the economy being the way it is either party is going to cut education. No doubt pell grants are going to be cut, and it’s everyone’s fault for electing presidents who spend money we don’t have.
You can fight over it all day but end story is Bush racked up a ton of debt before leaving office, and right when we needed a leader who would be fix it, Obama came in and spent even MORE. There’s an easy solution – VOTE for someone who’s more concerned about the ECONOMY than their reelection. There’s an idea! Elect someone who will FIX this landslide instead of blaming everyone else for their mistakes. It’s that or another 4 years of uneducated spending and blaming people for the consequences. “I couldn’t do it because of Republicans, blah blah blah Tea Party Tea Party!” you can make excuses all day but at the end of the day the only thing that matters is PROGRESS.
Though this is discouraging, if we get organized, we can fight to get these cuts reversed. Sign up to get involved here: http://www.facebook.com/pages/Save-Our-Students/229726047062458
Obama sycophant, Treasury Secretary “Turbotax” Tim Geithner said last Tuesday there is “no risk” the U.S. will lose its top credit rating amid a new analysis that revised its outlook on American debt to “negative.”
Geithner took to the airwaves of financial news networks last Tuesday to push back against a report Monday by Standard & Poor’s that lowered its outlook on U.S. debt to “negative,” reflecting political uncertainty over whether lawmakers will reach an agreement to address long-term debt. There is no chance that the U.S. will lose its top credit rating, Geithner said, forcefully disputing the notion that S&P or other ratings services might downgrade U.S. bonds from their current AAA rating.
Late Friday S&P lowered the US credit rating to AA+
Thus, Obama is the first president in US history to preside over a lowering of our credit rating. Now the question is, who will our clueless president blame?
Bush
Tea Party
Tsunami in Japan
European debt crisis
Lady Gaga
Right Wing Radio
Jet Owners
The Rich
Racist White People
Sheriff Joe
POTUS Teleprompter
Fox News
Overweight Children
Other non Liberal Affiliated Person/Organization
(you can vote for more than one)
Post-debt deal, President Obama has already meekly mentioned that the tsunami and Europe have been part of the challenges that this country has faced–statements that are easily inferred to attributing these events as part of the “blame.”
The most effective political and personal strategy (and probably the most accurate assessment), however, would be for Obama to blame the Republicans and/or the Tea Party, who insisted on an economically crippling strategy of not even raising revenue by removing unproductive loopholes and deduction (much less raising tax rates from their bargain-basement levels) and then to call for people to pressure their representatives not to exclusively slash spending. Instead, to this point, Obama has preferred the conciliatory approach, hoping that all sides will somehow come together and agree. That’s not how negotiation usually works–not in Washington, not in Wasilla, and not in most any place in between.
How hypocritical of you to ask who Obama is going to blame when it is the Tea Party (and their Republican puppets) who refused to back down from their Draconian plan and still insist on attacking the President. Obama’s plan was for about 3/4 cuts, 1/4 “revenue”, and even that structure–still plenty lopsided for the conservatives–wasn’t good enough.
“borne the biggest brunt”
There’s only one brunt, and it’s automatically the biggest.
We should eliminate all subsidies.
you should eliminate yourself.
Spoken like a true intolerant Lib.
You want intolerant? Visit a tea party meeting.
Have you ever attended a Tea Party meeting? I certainly attended Cal, and I can tell you with certainty that when it comes to basic closed-minded and intolerant attitudes, the TP people don’t hold a candle to your typical autocratic Berkeley progressives, who corrupted the term “liberal” decades ago…
Just because a few extremists on the left might be more radical doesn’t mean that the Tea Party is (also) radical and dangerous. And those “Berkeley progressives” didn’t threaten to bring the country to further financial shackles in the debt discussion like the Tea Partiers did, by refusing tax hikes even on the rich and/or corporations (who, by the way, have proven that they won’t hire, even with tax breaks) and instead (paradoxically) preferred to take away aid to seniors, the poor, and even the middle class, even though many (if not most) Tea Partiers fall within in those groups.
Thus your claim of Berkeleyites corrupting the term “liberal” is desperately weak. The corruption is a far bigger problem–for everyone–on the other side of the aisle. Unlike many Repubs / conservatives, I am more than willing to call out anyone on any side if they are hurting the process. Right now, though, those radical leftits are plenty muted.
[Just because a few extremists on the left might be more radical doesn't mean that the Tea Party is (also) radical and dangerous.]
And the Tea Party people are “radical and dangerous” merely because they want fiscal responsibility?
No; I want fiscal responsibility also. I would even support a balanced-budget amendment that really is balanced.
The teabaggers are radical and dangerous because they (and many of the Republicans in Congress) refuse to support even careful raising of taxes, even on the wealthy, even though it wouldn’t hurt most Tea Party members.
The corporations and the wealthy have had 5+ years of low taxes, and they have not used those tax breaks to hire. The theory of lower taxes (among the wealthy and corporations) translating to jobs does not apply if there is excess capacity and no increase in demand. Meanwhile, Fortune 500 cash reserves are at an all-time high, and effective tax rates are at a multi-decade low.
Returning taxes to historical levels (and matching it with careful government cuts, which has already happened) is THE best way to solve the deficit, create jobs, and preserve the economy (e.g., GNP). Given that the wealthy and corporations (and everyone else) prefer to hoard money and/or spend it overseas or on luxuries that don’t spill down to the broader economy, it’s time for the government to put that money to work. They’ve had their chances to stimulate the economy on their own. I would also support reasonable tax breaks, especially for small businesses, that are directly linked to a net increase in number of employees.
So much for hope and change. How ’bout having his Wall Street buddies “chip in” for once?
I saw so many grad students supporting this guy in 08. I hope you all have grant money.
You act like this is Obama’s doing? He wanted a clean vote on the debt ceiling.
Obama wanted a clean vote to get him past the next election. He could give a rats arse about the country.
Really, libsrc? This debt debate–and the resulting upward notching of graduate loan costs was all about the radical agenda of the teabaggers and those Congressional representatives who agreed to the pseudo-oath by the Americans for Tax Reform, both groups of whom refused to raise taxes, even on the rich and corporations, even if they haven’t used their record-low effective tax rates to hire employees and/or create jobs. Obama was a weak negotiator, and he has been overly careful to protect himself for the next election, but at least he talked about a plan of spreading the pain around, which included a mix of cuts and tax revenue that could’ve let this educational aid remain untouched.
[Really, libsrc? This debt debate--including the upward notching of
graduate loan costs--was all about the radical agenda of the teabaggers
and those Congressional representatives who agreed to the pseudo-oath by
the Americans for Tax Reform, both groups of whom refused to raise
taxes, even on the rich and corporations, even if the wealthy elites
haven't used their record-low effective tax rates to hire employees
and/or create jobs.]
Spoken like a true whiny socialist. Let’s see if you hold the same views 5, 10, 15 years from now, when you’re the one out there working, and seeing how much comes out of your paycheck each month, much of it to pay down the deficit as well as fund a bunch of entitlement programs for people who have never paid a dollar of income tax in their entire lives. You just might have a different view of things…
I am neither whiny nor socialist; you’re just throwing out the same baseless, vitriolic buzzwords that conservatives have spewed for decades.
And actually, I am out there working, and have done so for many years post-college now. I have two marketable graduate degrees (both of which that you have mentioned, coincidentally, in a separate post) and am on the way to finishing my third and final one. I have earned six-figure income for many years and have paid six-figure taxes. It’s pretty foolish of you to unleash accusations regarding things that you know nothing about.
And I also believe that the most powerful, wealthiest countries of the world should provide a safety net for their most needy. I also support reasonable restrictions to be put in place so that free-riders don’t graze on the system. The answer is definitely not to slash expenditures and entitlements and then hope that businesses start hiring and that at least the honest families, individuals, infirm, and seniors will magically be able to get back on their feet with even less aid (given that they couldn’t do it with more).
Socialist? Hardly.
Enlightened moderate? More accurate.
Since when the federal government has EVER increased the funding for education in the last half of century?
The federal government didn’t fund education until 1969. It’s now spending over $90B/year.
There must have been some increases in there somewhere, no?
But thanks for providing more evidence on how numerate the progressive community is!
Uh, I do not understand why you turn this into an attack to the progressive community.
For the record, federal government already started supporting the education in 1890 with the Second Morril Act. Even the famous GI bill spending is passed much earlier than the year you said (in 1944). Regarding to funding, ED administers much less than 90B/year like you stated for. It administrates all grants and other funding together only $69.9 billion. Only 14% of CA funding for schools comes from the federal government. Nationwide, there are 19.1 million students enrolling in postsecondary education and the number will keep increasing. Not only the federal government does not increase the federal financial aid and other educational spending, it decides to decrease it, especially during economic downturn when middle-income families can barely support their own mortgages.
On the other hand, Congress still considers keeping many tax cuts, which include the Bush tax cuts. Treasury estimates the costs of making the tax cuts by themselves permanent for everyone is $3.7 trillion over 10 years (about 370 billion per year). The federal government may not have decreased the spending exactly comparing to before historically, it certainly has not kept up with the needs of the population. Seriously, less than 70 billion for education spending comparing to much and much more than 370 billion per year for tax cuts? Much of the tax cuts are still kept for big corporations and wealthy families that do not need them, but I still don’t see any economic improvement. Meanwhile, every dollar spent on education has so much return to us in the future in terms of knowledge and tax revenues. California receives only $0.78 from the federal government for every tax dollar we pay, so what makes you think we as students and as future tax payers unreasonable to ask the federal government to spend on education?
Nice way to try to change the subject! But even your own reply answers your original point: of course federal ed spending has increased in the past 50 years. Even this bill expanded Pell grants.
As to commenting on progressives lack of ability to handle numbers, perhaps I misunderstood you series of posts here & elsewhere. Are you instead Republican?
Whether I am a Republican (or not), should not affect my ability read the numbers and facts.
In return to your statement, the so called expanding the Pell grants is merely keeping the max award that each undergraduate receives. If you do some digging from College Board, graduate students do not have much grants in the share of their budget (declined to 27% from somewhere around 32% the last decade) and mostly fund their cost through working and loans. In addition, the share of subsidized Stafford loans of the cost of attendance has declined for the last decade, which results of more unsubsidized loans covering each student. Clearly, going back to this article, this is a slap in the face for graduate students. The so-called increased spending on education is merely an illusion that the students are getting more teaching and aids, but it actually only covers the inflation and the increased number of people in the population.
Since “The so-called increased spending on education” exists, you’ve answered your original question about “Since when the federal government has EVER increased the funding for education in the last half of century?” _and_ demonstrated your inability to understand numbers. Nice work!
Next time you put up a straw man, you might want one that’s not so easy to set fire to, eh?
Nope. I like to set things on fire so that I can have a good discussion about it even if I answer my own question :)
You are clearly under the mistaken impression that you are even relevant in the greater scheme of things. Typical Berkeley progressive, sheltered in your community of like-minded fools, afraid to go out in the real world because your precious little theories on how the world works might not fly in the big leagues…
Ah, name calling and insulting again. I think you need to educate yourself more about Berkeley. People from Berkeley made countless differences to the world, whether it is science research, social equality movements, or policy-making. While some of our values may not agree with yours, we go out into the real world much more than you can ever imagine. I dare to ask what kind experience do you have? Too bad I cannot confirm the facts from your personal life, but if you resolve to name-calling and personal insulting again, all I can say is that I feel sorry for your insecurity in your heart.
[the share of subsidized Stafford loans of the cost of attendance has
declined for the last decade, which results of more unsubsidized loans
covering each student. Clearly, going back to this article, this is a
slap in the face for graduate students.]
You can always get a real job like those in this country (many of them never fortunate enough to have the opportunities you do) who subsidize your loans in the first place. Sorry for the lack of sympathy here, but OFFICIAL unemployment is in the double-digit range in California, the unofficial rate is estimated to be 1.5x higher, and the underemployed are another 20-25%. You need to do like everyone else – learn to get by with less.
I hear a contradiction somewhere here. If the unemployment rate is so high, then how would you expect the graduate students to get a good job to pay back the loans in the future?
And by the way, “learning to get by with less” is not a solid argument here. Again, if people cannot even get a job now, how would you expect them to pay back the loans without starving themselves?
[I hear a contradiction somewhere here. If the unemployment rate is so
high, then how would you expect the graduate students to get a good job
to pay back the loans in the future?]
If your proposed course of study isn’t compensatory enough for you to pay back your loans, then why are you majoring in it? I chose an engineering discipline, not only because it interested me and I had the aptitude to succeed, but because it promised to pay for itself down the road. Now if you’re worried you can’t get a job with an Art History or Ethnic Studies PhD, maybe you should reconsider whether grad school is worth the time and effort…
I think you assuming that vast majority of those who cannot find a job are those that major in “soft” disciplines. The truth of the matter is it is not true. People with talented skills from all across of disciplines (e.g. MCB, bioengineering, economics, business, and public health) are ALL having difficulty looking for a job. I am happy for you that you are able to have good engineering job, but you perhaps need to have some sympathy for those that are not as fortunate as you are. In addition, expecting everyone to major in engineering just so that they have a higher salary is simply unreasonable—not everyone fit in or interested in that field and there is no reason they should be punished for that.
[People with talented skills from all across of disciplines (e.g. MCB,
bioengineering, economics, business, and public health) are ALL having
difficulty looking for a job. I am happy for you that you are able to
have good engineering job]
Thank your “hope and change” hero for that, who has most business types sitting on their money and hedging their bets, wondering what type of clever idea he’s going to come up with next. The marketplace doesn’t need interference by “progressives”. The best thing you people can do to promote economic recovery in this country is to stay the hell out of the way…
If you did not have a lesson about not making assumption and hence not labeling people, perhaps a tolerance lesson will do you some good.
[People with talented skills from all across of disciplines (e.g. MCB,
bioengineering, economics, business, and public health) are ALL having
difficulty looking for a job. I am happy for you that you are able to
have good engineering job]
Thank your “hope and change” hero for that, who has most business types sitting on their money and hedging their bets, wondering what type of clever idea he’s going to come up with next. The marketplace doesn’t need interference by “progressives”. The best thing you people can do to promote economic recovery in this country is to stay the hell out of the way…
You seemed to be doing well until you said this: “has not kept up with the needs of the population.” No one can assign specific dollar values to something so vague as the “needs of the population.” Anything beyond food, clothing, and shelter is probably a policy matter rather than a need.
It sounds to me from you that education is NOT a need in our society? Would you elaborate?
[It sounds to me from you that education is NOT a need in our society?]
Where did he say that? Or is this merely the typical knee-jerk reaction from so-called “progressives”, where anyone who criticizes any facet of the education bureacracy is some how “opposed” to education?
Sorry, not all of us fall for that nonsense. You’re going to have to try a lot harder if you want the grown-ups to take you seriously…
Again, the name-calling and making generalization are things that a grown-up should NOT do. Perhaps you need a reality check.
And for the record, I was asking for a clarification.
[Again, the name-calling and making generalization are things that a grown-up should NOT do.]
Where was the “name-calling” again? There was no “name-calling” in my post – unless you consider the term “progressive” to be an insult (and in that case, you may have a point).
[Uh, I do not understand why you turn this into an attack to the progressive community.]
The “progressive community” in many cases lives in a la-land of its own making – devoid of reality and often pushing agendas and goals that counter each other. For example, protesting that poor American can’t make a “living wage” while supporting the same illegal immigration that drives wages downward for the unskilled in the first place. Another example: complaining about poor public schools in black and hispanic communities while sucking up to the same public education unions that refuse to allow competency testing so we can weed out bad teachers. The so-called “progressive community” deserves all the criticism it gets…
You are making generalizations that all progressive community support the same things. I do not, for example, make generalization that the conservatives deserve all sort of criticism because they all rich, white guys who inheritated all the money from the previous generation then complain about the deficit while refusing to get rid of tax cuts. Let us avoid the finger-pointing and name-calling and stick to the actual issue respectfully.
The actual issue is that so-called “progressives” can’t accept that we have budget crises on both the state AND federal levels due to out of control spending. The REASON they can’t accept that truth is because progressives believe that the fundamental role of government is redistribution of wealth.
The fact of the matter is that all the tax increases of the world will NOT solve the issue of a government that can’t control spending. However, you progressives can’t handle that, because you’re obsessed and driven nuts by the fact that some people have more wealth than you do – and in your mind, they need to be punished.
Again, I am not interested in distribution of wealth neither I am suggesting that is my solution. NOT AT ANY POINT am I saying those who have more wealth should be punished…that is simply ridiculous. However, I do believe that those with very high-income should be expected to contribute more on taxes so that we can support a strong nation.
I do agree with you that simply raising taxes, especially to the low to middle class, is not the solution. However, the government should play a role at helping to create jobs and at attracting more investors. But so far, I haven’t hear a solution from the conservative policy-makers besides tax-cuts, which so far, I do not see it works at all. Perhaps you can suggest one?
[I do agree with you that simply raising taxes, especially to the low to
middle class, is not the solution. However, the government should play a
role at helping to create jobs and at attracting more investors.]
The best way government can to that is by less taxation, less regulation, and getting the hell of the way out of the productive members of society. The average small businessman in this country still understand more about economic growth than your typical economic policy wonk in DC, which is often someone who never held any position of responsibility in the private sector. Really now, some of you uber-idealistic Utopian types need to get out of Bezerkely more often…
[I do agree with you that simply raising taxes, especially to the low to
middle class, is not the solution. However, the government should play a
role at helping to create jobs and at attracting more investors.]
The best way government can to that is by less taxation, less regulation, and getting the hell of the way out of the productive members of society. The average small businessman in this country still understand more about economic growth than your typical economic policy wonk in DC, which is often someone who never held any position of responsibility in the private sector. Really now, some of you uber-idealistic Utopian types need to get out of Bezerkely more often…
Bush doubled fed spending on education. It’s his fault…LOL.