COMMENTARY: Reduce college debt with refund incentive program
The continuous rise in college tuition has made it impossible for some people to attend college without taking on the burden of tens of thousands of dollars in student debt. The average cost of tuition and fees for a four-year college is $34,740, while the average college student debt is approximately $38,390.
For students to pay back student loans, the average repayment plan is 10-years, but research shows that it takes about 21 years to pay off the average bachelor’s degree. As many as 40% of people choose to not pursue extending education because of the debt acquired.
The main cost of attending college is fees. These fees are used to fund campus programs and include technology fees, library fees and athletic fees, along with many other fees for different aspects of attending college. Some schools even charge a distance learning fee for online students, which makes no sense since the school does not have to provide anything but a professor willing to post assignments online.
One idea being tossed around is making college education free at public institutions. If college were to become free in Texas, who would pay for tuition and fees?
Many free college programs use a grant obtained from taxpayers to pay for a two-year program attended by recent high school graduates. There are 24 states currently offering a free two-year tuition program while New York is the only state to also assist students in a four-year program.
In order to qualify for these programs, in-state students must apply for the program and apply for FAFSA. Any individual or middle-class family making $125,000 or less can qualify for this program. The available funding differs from state to state. Of course, there needs to be certain requirements to maintain a free education. A minimum GPA of 2.0, a minimum of 6 hours per semester, and the student must be continuously enrolled until the completion of the degree.
There are many pros and cons of free education. More lower-income students would be able to attend, and student debt would no longer be a burden to the younger generations.
But while there are positives to free education, there are also negatives. Without financial responsibility, attending and passing classes might not be as important to the students. Another con to free education is more people going to college. With an enrollment increase, more money would be needed to operate colleges.
How about having a refund incentive program? Instead of having a completely free college education students would still have the financial obligation when enrolling for classes, but upon completion of a degree the government could refund a set amount to all graduates.
This refund could be applied to paying off student loans first with any leftover issued as a tax credit or paid by check. With this option available, students will still be accountable for the classes taken to complete the degree. Class attendance and maintaining a passing GPA would still be important because without the completed degree, full college tuition would still be charged to the student.
Issuing graduates a refund not only relieves the stress of having debt but would stimulate the economy by allowing graduates some financial freedom. Many graduates are beginning a new chapter in life and could use extra money to purchase furniture, professional clothing, or even make a down payment on a home. It would also stimulate college retention and student success because there would be an immediate financial reward upon graduation as an incentive for students to take their educational experience seriously.
There has got to be a solution to make college more affordable. To remove the barriers set upon the people who want to go to college but cannot afford to attend. As a young adult, is it better to accrue thousands of dollars’ worth of debt to attend school, or is it better to jump straight into the workforce to avoid the stress of paying back that debt. If society, in general, is uneducated, what does this mean for the future?
