Page 217 - Crisis in Higher Education

188 • Crisis in Higher Education

being the largest component at $31.3 billion. Having need-based grants
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for higher education is appropriate, and they have strong support for
continuation. However, the ultimate goal, although it may not be reach-
able, should be for need-based grants to disappear as the following occurs:

1. The economy improves and more good jobs are created.
2. Families implement financial plans that help them reduce day-to-
day expenses and big-ticket purchases, improve earnings, and save
more.
3. Universities find ways to cut costs.

9.3.2.2 Student Loans

There are two broad categories of loans, federal and private, and there are
several different types of federal loans—some are subsidies, whereas oth-
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ers are not. Annual borrowing is more than $100 billion, and total stu-
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dent loan debt has reached a staggering $1.35 trillion. This has allowed
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colleges and universities to continue to increase tuition and fees substan-
tially. Actions must be taken to rein in borrowing on the demand side so
students want and need to borrow less because they find ways to spend less
on their education. These actions are described in Chapter 6.
It is important to help students understand their obligation to repay
loans and how repayment may impact their living standard. To do this,
students must prepare a student borrowing and repayment plan (SBRP)
that specifies how much they plan to borrow, the precise use of these
funds, and what they will forego after graduation to make loan payments.
The lender is required to review the SBRP with students and their families.
This is a logical extension of the family budget, which is discussed here
and in Chapter 6. It requires students and their families to think clearly
about how much they are borrowing and the consequences of repayment.
Are students willing to postpone buying new cars and taking vacations
until their loans are repaid? This process may provide incentives to spend
less and borrow less.

9.3.2.3 Work-Study Jobs

This program provides part-time jobs for students who have financial needs.
The program encourages community service work and work related to the
student’s course of study. More than 3,400 institutions of higher learning
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