Fellow college students, I am pleased to announce you are part of the most important constituency in the nation: the swing vote. Yes, despite a prevailing general assumption since the 1960’s that college students are essay-writing Sandinistas willing to exchange their laptops for small arms in pursuit of a cultural revolution, today’s reality is one where we vote as a moderate, center-left bloc. That is, those of us who do actually vote. My point? With a race as tight as this, Mitt Romney and Barack Obama want your vote, badly. And you shouldn’t just give it to either of them. As citizens we have the resources, know-how, and right to understand what a Romney or Obama administration means for us, as Willamette Students, for the next four years. Below is my non-partisan, point-by-point analysis of the fiscal issues I believe most broadly affect us as students.You decide what policies would be most conducive to you realizing your post-graduate dreams.
The first, most immediate issue: Financial Aid. The federal government controls Pell Grants and government subsidized loan rates, so that’s what we’ll discuss here. The average college student has parents whose combined income fall into the jointly-filed middle-income tax bracket ($70,700- $142,700 a year). This means that with a Willamette-style tuition, you almost assuredly require some form of financial assistance to stay in school, even more so if you have siblings. If your parents are in this bracket, it is unlikely that Pell Grants affect you, but it is still very possible given the Dept. of Education’s comprehensive formula. Romney’s stated position is that he wants "refocus Pell Grant dollars on the students that need them most”- this is consistent with his running mates’ budget, which would lower the income level at which students qualify for an automatic maximum grant, and create a maximum income eligibility level. He would also freeze the grants at $5,500. Over one million less students would qualify (mostly from middle-class homes, the grants would continue to serve low-income groups). When it comes to loans, Romney has pledged he would eliminate two Obama-era initiatives, an income-based repayment cap limiting payments to 10% of monthly income, and the Public Service Loan Forgiveness Program, which provides loan forgiveness after ten years for those who work for the public good (e.g. teachers, social workers, construction). Romney’s plan seems to focus on the long-term, arguing that tuition is too high, and that pouring out aid now will only burden grads later when the interest rates of the associated federal deficit drive us all into higher taxes and a depressed economy, thus eliminating future job prospects.
It is safe to say that Obama strikes a sharp contrast; spurning the idea that we can sacrifice short-term growth for long-term fiscal responsibility, Obama would allow the Pell Grant maximum to increase for 2013, expand access to greater numbers of low and middle-income earners, and continue to support the two loan programs mentioned above in Congress. He balances these increases with some reductions: whereas Stafford loans were once interest free while one was enrolled in school, they now have a 3.4% interest rate for Undergrads, and a 6.8% rate for post-grad education (You can still defer the rates until after you graduate, but the compound will be capitalized on your payments thereafter). Obama has indicated that he wants Congress to keep those rates down.
The second issue: Jobs for when we actually live in the real world. This calls for a much larger debate than this column allows, but I’ll try to be fair and succinct. The same deficit hawk arguments that underpin the Romney/Ryan education funding policy speak to their opinion of jobs; money spent now on government jobs will only depress the economy later, when the interest rates on our debt force everyone to pay higher taxes and suppress private-sector job growth. Policy recommendation? Cut government jobs drastically, particularly in places like the National Endowment for the Arts, NPR, and social services (Head Start funding, Planned Parenthood). On the flipside, Romney would lower the corporate tax rate to a stated 25%, closing unnamed corporate tax loopholes, which would spur private-sector job growth by freeing up corporate cash to hire employees, making up for the losses in firing government workers. Most corporations are already hoarding cash ($1.73 trillion according to the Fed, a 50% increase from 2007), so one wonders if giving them more would actually create jobs. Obama would also lower the corporate tax-rate to 28%, but has specified loopholes he would close in his most recent budget that would level out revenue losses from the 7% decrease from the status quo rate of 35%. Again, whether or not this would create jobs is unclear, but the noticeable difference is that Obama wouldn’t gut the government jobs, so those would still be there.
In sum, there is no one answer to which candidate will serve all of us college students better (speaking fiscally), but there are some clear revelations. For example, if you come from a low-income background, the differences between the two candidates are not actually that wide; in fact, the Romney/Ryan ticket has made a clearer commitment to refocusing Pell Grants on your demographic (cropping the size of the program as a whole). However, if you are in the middle-class, it is evident that the Obama administrations’ policies will keep doors ajar for you that will close under Romney. There are larger factors in our ultimate decision; who supports your social causes? Who is more likely to take America to war? Who truly cares about the lower-class when it comes to social spending? The answers to these broader questions about the future of our country have to matter, but that doesn’t mean we shouldn’t be considering our immediate financial interests, especially in an economy as volatile as this. Speaking strictly economically, I think the important questions for us are: How much do I need the governments’ help in paying for my education in the short-term, and which candidate will deliver it? And, how much will the deficit affect my job prospects, and will either selection deliver me a certain answer?
