How will you pay for your teaching degree?
Well, it appears that the future of student lending is still very much up in the air. In an effort to make student lending available to a larger, more economically diverse population, President Obama has introduced a plan to overhaul lending practices. These efforts should result in a savings of $94 billion over the next 10 years.
However, these changes present a few dilemmas ethically and have sparked much resistance in the private lending sector. From one perspective, it appears Obama is trying to flex the muscle of his administration and expand the role of government, yet again. On the other hand, one could say he is simply trying to refine a system that has been stealing dollars from tax payers and poor students to line the pockets of bank executives (yes, a theme we are all familiar with now).
What this program will most likely be doing is capture the profits of banks (student lenders) coming from government subsidized lending. Since the subsidized lending system has essentially eliminated all risk for banks, one could very easily make an argument for doing away with private student lending all together. They are currently acting as the typical middle man, but taking practically 100% of the profits associated with student loans.
“Under the subsidized loan program, the government pays lenders like Citigroup, Bank of America and Sallie Mae, with both the subsidy and the maximum interest rate for borrowers set by Congress.”
- New York Times, April 12th, 2009
So, with arguments piling up that we’ve all heard numerous times before, “Government expansion”, “Loss of jobs in the industry”, the public is having less and less sympathy for big banks. Perhaps the fear of an expanding government is paling to the idea that we must reform the student lending industry, and financial system at large, in order to move ahead in a more efficient matter. Honestly, what’s the point of keeping jobs that provide little to no productive service to the country?
From a prospective teacher’s perspective, or a current teacher contemplating the commencement of a master’s degree program in education, loan opportunities will continue to be there for when you decide to earn your teaching degree. In fact, in the future, these loans may even get cheaper and more accessible.