Candidates on student debt, higher education costs
(CBS News) The cost of college went up again. The full cost for a year at a public college hit nearly $18,000. If that isn't sticker shock enough, the average cost of a private education is almost $40,000 per year.
Both presidential candidates have plans for helping students pay for college.
Kevin Stump, 24, has $18,000 in student debt. He sees it clouding his future.
"When am I going to buy a house? Can I buy a house?" Stump said. "I am drowning. I am just trying to keep my head above water. I am not alone. All young people are feeling this."
Thirty seven million Americans, in fact, are feeling this. Nationally, student debt now surpasses all other forms of consumer debt.
"They're all saying: 'Student debt! It's a crisis!' But nobody is saying how to deal with it," Stump said.
More than 90 percent of student loans are made by the federal government.
"Millions of young people all across the country are getting better deals on Pell Grants. We're able to keep our student loan rates low," President Obama said recently.
President Obama has more than doubled spending on Pell Grants, the main aid program for low income students. He has proposed a billion-dollar "Race to the Top" contest to reward states for reforms that cut college tuition.
The president also supports debt forgiveness; forgiving a loan balance after a debtor has paid 10 percent of their income for 25 years.
Mitt Romney said: "Don't expect the government to forgive the debt that you take on. Recognize you have to pay it back."
Governor Romney wants to reverse what he calls President Obama's "nationalization" of the student loan market.
He argues getting private lenders back in the process would make the system more efficient.
Romney would tighten eligibility on Pell Grants ... "refocus(ing) on students that need them the most."
People like Kevin Stump are stuck in the debt cycle.
"I'm very much accumulating more debt," Stump said.
Stump is looking to borrow another $2,000 to pay for a Master's degree. He needs it, he said, to get a better paying job so he can pay off his debt. That's another reason the crisis keeps ballooning.
"It's now a trillion-dollar story and counting," said economist Max Wolf, adding that it's fast becoming a burden on the entire economy.
"You either figure out a way to make education affordable again or you go back to having a vast underclass which is uneducated and even more cut off from opportunity which has social and political implications that are neither pretty nor desirable," Wolf said.
It's become a Catch-22, Wolf said. In this economy, not having a degree is almost a sentence of poverty. On the other hand, paying for the degree can sink you into poverty.
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