Thursday, August 07, 2008

On Student Loans: Here's an Idea

The State's going through a lot of hoops to make sure MEFA has funding available for its loans. In fact, while I appreciate the effort, Governor Patrick and others are trying so hard that I can't help but ask a few questions.

My first question is this: why have we let state colleges in Massachusetts become so prohibitively expensive that people are desperately searching for funds? Seriously, the UMASS system and other state schools are just rediculously overpriced at this point - meanwhile the state funds the system at the second worst rate in the country, per capita. The University now depends on charging students vast sums in fees just to keep the institution affloat, fees that are preventing many students from earning a college education in this Commonwealth.

Here's my second question: if MEFA is such a sound investment, why isn't the state kicking in the difference? Surely, we could have found $425 million somewhere, money we'll be able to get back with a sizable interest (6-8% annually!). By shopping these loans at Harvard and MIT, it's a very cheap way to ask them to scratch our back, while we scratch their's in much more expensive ways - funding for research at private universities over our UMASS system's, burying the bill that would tax Harvard's windfall investments that lead to profits of hundreds of millions every year (the head of their investment portfolio earns over $35 million a year at this 'public' institution alone) and other awful quid pro quos.

While MEFA is a program that thousands in Massachusetts depend on every year - I borrowed over ten thousand dollars in MEFA loans - it's not actually a program I would consider "good" in Massachusetts. We need to toss aside this rediculous notion that it's okay for students to take out upwards of $50k in debt at state schools to get an education. It should be free. It's free in many other places in the world. No student should be wondering whether or not, at this point in the summer, they'll have funding available to continue their education, yet it's a yearly conundrum for tens of thousands and it's only been exacerbated this summer.

My last question: Imagine what $425 million more in scholarships and fee wavers would do in this state, instead of going to fund MEFA? For starters, it would pay for Governor Patrick's free community college program twice or three times over. It may be enough money to extend a free public college education beyond the two years to anyone who successfully moves through the first stage. No matter how anyone looks at it, it's one of the best investments we could make in this state: not only do we need to keep our young smart and local, public investment in public colleges brings a return of over $3 for every $1 invested - $425 million would become $1.275 billion in economic activity. Not even MEFA's sound numbers bring in those dividends. It's time to rethink the way we do public higher ed in this state - and do it better.

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