Josh
Mowles
ECON122
Dr.
Kassens
July
23, 2013
Higher Education
The article that I will be
discussing is about higher education. In
the article it states that the student loan interest rates will by sky
rocketing in the next few years. Along
with this, tuition rates are at an all-time high and completion rates are at an
all-time low. The author discussed if
higher education is a bad investment, and the answer was no. She said that it
is still a good investment. She stated,
“[T]he increase in lifetime earnings associated with a college degree is now 75
percent higher.” (Tyson, 2013) Also in the article she talked about a
correlation between low income families and the lack of completion rate with
those individuals.
In the article, the author wrote
that interest rates are supposed to double in the month of July in 2013. (Tyson, 2013) In class, we found that interest rates are
the cost of borrowing money or the opportunity cost of holding money. If completion rates are already at an
all-time low, how would increasing the interest rate help this? Most students are already up to their neck in
debt from school. This will just make
the payments higher for them so there will be less of reason for them to stay
in school.
Something else that we learned in
class is that the government has two fiscal policies when trying to raise or
lower GDP. One of which, is lowering
government expenditures. This is what
the government is trying to accomplish when they raise the interest rates for
student loans. This may have an impact
of the GDP and help us out financially but what does it do to our future
workforce? The students that were barely
able to afford a higher education will no longer be able to. It will be harder and take longer for the
graduates to pay back all the debt owed for these student loans as well.
Throughout the article, the author states
how higher education is still a good investment. She talks about how there is a huge need to
increase the completion rates. I agree
with her in this, but I think that if the government would control the tuition
costs and keep the interest rates of the loans they offer at a lower level then
the completion rates will fix themselves.
Also, the government could add some more financial aid to help these
students. It would be expensive but the
government would be investing in its future with this additional spending.
Works Cited
Tyson, L. D. (2013, June 14). Getting More Bang
for the Buck in Higher Education. Retrieved from The New York Times:
http://economix.blogs.nytimes.com/2013/06/14/getting-more-bang-for-the-buck-in-higher-education/?ref=economy
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