Higher Education Project Reports

About 5.5 million undergraduate borrowers took out subsidized Stafford loans in 2005-2006. Most of these borrowers came from predominately low- and middle-income families. As an effort to making college more affordable, cutting interest rates on subsidized Stafford student loans will result in significant savings.

Cutting student loan interest rates in half will save the average working- and middle class borrower $4,420 over the life of their loans, according to a new report by U.S. PIRG’s Higher Education Project.

Higher education in America continues to be critical for both individual success and the economic and political health of our country. While college attendance has grown over the past two decades, state appropriations and federal aid have failed to keep pace with the rising cost of college. As a result, more students than ever must rely on student loans to pay for a four-year degree and start their post-collegiate lives with significant debt.

American colleges and universities play a pivotal role in training the nation’s citizens, leaders, innovators, public servants and educators. In today’s economy, a college education is more desirable than ever before – millions of high school students strive for its promise and the benefits it brings for both the individual and society.

The report finds that public college students from a family with a household income of $62,240 or less face an average of $3,986 a year in unmet need. On average public college students from families with a household income of $34,288 or less fare even worse, facing an average of $4,990 a year in unmet need.

Over the last three decades, higher education has become an even greater necessity for all Americans. Our citizens know that the key to economic success for them and their children is to invest in education.

In January 2004, the State Public Interest Research Groups (PIRGs) released Ripoff 101, a report documenting the high price of college textbooks. Ripoff 101 surveyed popular textbooks at 10 public colleges and universities on the West Coast and detailed the gimmicks publishers use to artificially inflate the cost of textbooks. The report sparked extensive media coverage, a call to action from hundreds of faculty members around the country, a congressional investigation, and government action in a number of states, including California, Connecticut and Illinois.

As the purchasing power of federal and state grants continue to decline in relation to increasing tuition and living expenses, students have increasingly relied on loans in order to finance their college education. Almost 65 percent of college students graduated with federal education loan debt in 1999-2000, and the average undergraduate borrower left school nearly $17,000 in debt with federal student loans.

Since its passage in 1965, the Higher Education Act has helped millions of individuals pursue dreams of a higher education. Without the HEA's well-structured federal financial programs, many qualified students in this country would be unable to afford the costs of college. The dividends of this federal investment are clear: in the national economy, in the health of our democracy, and in the individual liberty our country's citizens possess.

The student loan industry, a $40 billion dollar-a-year market, is dominated by federally subsidized lenders. These lenders receive millions each year in subsidies from the federal government in addition to income from loan interest payments. This report documents the political spending of the five largest holders of federally subsidized student loans, namely Sallie Mae, the Student Loan Corporation of Citibank (a subsidiary of Citigroup), First Union National Bank, Wells Fargo Education Financial Services, and the National Education Loan Network (Nelnet).

A college education is one of the best investments of a lifetime. Bachelor degree recipients earn 80% more than high school graduates, or $1,000,000 over a lifetime in the workforce.1 Yet, a higher education is not simply a means to achieve higher earning potential, it should also be a life enriching experience. Colleges and universities foster both academic and personal development – from community service and civic engagement, where students learn how to become active participants in democracy, to team athletics, where students gain valuable leadership experience.

Higher education is critical to the future success of Americans. In addition to the inherent benefits of a higher education, a college degree is worth 75% more than a high school diploma or more than $1,000,000 over a lifetime in the workforce. However, as college costs continue to swell, students are increasingly shouldering high levels of debt to pay for a college education.

Higher education is critical to our society. In addition to providing the social benefits of an educated citizenry, education is essential for economic growth. As the economy becomes more technology-based, higher education becomes increasingly important for economic success, both for the individual and the nation. Neither an individual nor society can make a better investment in the future than a college education.