In today's society it is extremely advantageous and almost necessary to a earn a college degree in order to have greater access to employment. However, the exorbitant expenses incurred in gaining a higher education hamper and prevent many would-be pupils from acquiring a diploma.
Although it is true that loans play a vital role in acting as a financial cushion for students in helping them attain a college education, the government should take supplemental measures to promote higher education.
A recently revived bill called the Student Aid Reward Act, which has been stranded in Congress since 2005, would help more students attend college, save the government money and therefore enhance overall economic success throughout the United States.
Under the current loan system, there are two ways for students to get loans: the Federal Family Education Loan program and the Direct Loan program. In FFEL, private banks provide money for students, and the government assumes full responsibility in case the student defaults on the loan. In the Direct Loan program, the government lends directly to students at a comparatively lower rate and pays for it via the sale of U.S. Treasury bonds.
The FFEL program is more costly to the government and hence to taxpayers because it unnecessarily inserts the banks into the transaction and provides them handsome profits. This corporate subsidy may aid the economy by assisting participating banks in maximizing profits, but it lays the expense at the feet of the taxpayers.
Direct Loans are a much better bargain because they eliminate this superfluous corporate liaison between students and their loans. In an effort to enhance this benefit, SARA seeks to provide incentives for schools to switch to Direct Loans by supplying extra grant aid to increase federal scholarships, especially to lower-income students.
Moreover, the savings advertised by promoters of this bill would be large, as the bill affords more than $10 billion in extra scholarships, $15.5 million of which would go to both undergraduate and graduate students in Wisconsin. None of this would cost the taxpayers a dime.
Obviously good things happen when the government allocates a large amount to furthering students' education. Currently in the United States, economic success in the global market relies on innovation and specialization coupled with higher education.
Additionally, domestic employment access often correlates with the level of education an individual attains, so that if more people went to college they would have access to a larger variety of adequately paying jobs.
Consequently, on a national level, this means reduced unemployment and higher tax revenues since more people are working. In addition, if more people work better paying jobs, need-based crimes fall because more people are able to pay for the cost of living without undue stress.
Above all, the first link in this potential sequence is greater access to higher education because more students, especially economically disadvantaged ones, would be able to go to college.
Finally, the most important aspect of this bill is that it would act as an equalizer to balance the unfair hand dealt to those who have had to struggle with economic hardship. Only by actively promoting equality can this country show a commitment to true justice.
