Obama’s 2013 Budget Plan: Defense a Winner, Higher Education a Loser
The United States fails in investing in things that were once a public good
Last week, President Obama unveiled his fiscal budget plan for FY 2013. A quick look at appropriations makes this clear: defense remains a winner, and higher education is still a loser.
The administration is requesting a $69.8 billion budget for higher education, a slight increase from last year (Inside Higher Ed and Higher Ed Watch provide good outlines on the proposed budget plan for these appropriations). Conversely, the budget proposal for defense stands at $525.4 billion. Despite claims that the defense industry would be cut significantly, these so-called cuts to the budget – for the Pentagon and contractors – turned out to be minimal. In addition, Pentagon officials and defense industry contractors were not concerned about the budget plan. The funds allocated for higher education versus that of defense are drastic, and illustrate how the United States continues to fail when it comes to investing in things that were once believed to be a public good.
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Meanwhile, the cost of college continues to skyrocket, and millions and millions of people who have already taken out loans are struggling or unable to pay their student loans. Defaults are on the rise, and more student loan debtors are scrambling to make ends meet. See the graph below:
As the Loop 21 reported earlier this year, some experts anticipated outstanding student loan debt to hit $1 trillion before the end of 2011. Finaid.org, a guide for financial aid, is tracking the figure with a student loan debt clock. At the time of this article’s publication, the clock was over $980 billion, edging closer to that trillion dollar figure by the minute. Furthermore, the proposed budget for higher education is, overwhelmingly, aimed at prospective students. For example, a primary focus is on job-training programs at community colleges, as the President has proposed to spend billions of dollars on programs that already exist. If the sole intention of going to college is to be trained, there is nothing wrong with increased spending on that front. However, higher education has not always been about churning out workers. At one point, as mentioned above, it was understood as being a public good. That is a larger, societal problem that deserves consideration and discussion.
When it comes to the basics, the budget proposal appears to be much of the same: institutions allocate the funds, and then disburse it to students. This plan also does not attend to current borrowers, especially those who are distressed. So, the money continues to be funneled into higher education institutions and for current and prospective students. (On a good note, at least the for-profits, at this point, will not be receiving this additional funding. That industry and its lobbyists are enormously powerful on the Hill, so a battle is more than likely to occur now that the plan has been announced).
When it comes to people with existing student loan debt, particularly those who are no longer in school, there is another glaring issue with the proposed budget for higher education. It is true that the administration has done more marketing and advertising for the Income-Based Repayment program (IBR), especially when President Obama discussed it this past Fall in a speech in Colorado. (This blog post on WhiteHouse.gov also illustrates a concerted advertising campaign for IBR). Of course, the administration isn’t just making up for the Department of Education’s failure to properly market these sorts of programs. When the President delivered his speech, only 450,000 – as noted by the Loop 21 – were enrolled in IBR. While it is likely that more people have enrolled in the program since the Fall of 2011, they are no bold plans to help those who are struggling or unable to pay off their loans (i.e., those who have defaulted on their federal loans). No attention has been paid to private loans, even though more people are turning to these funds as a result of tuition increases.
It is an election year, but those who are already drowning in student loan debt make up a decent percentage of voters. If the administration is committed to helping future generations, turning their full attention to distressed borrowers would prove how seriously they take that claim. What is one simple step that could be done right now in Congress, and then promoted by the administration? The restoration of bankruptcy protection rights for student loan debtors – at this juncture, it is essentially impossible to discharge federal and private loans. An individual can include their gambling debt when declaring bankruptcy, so why are student loan borrowers trapped for life?