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There is no disputing the fact college education is hugely expensive. Our students may now have to pay much more thanks to Washington. Decades from now, many have to face massive repercussions and have to make certain sacrifices and make hard choices. The fight that is obviously brewing in Washington may be very costly for our future college graduates.

It is very difficult to cover escalating costs with outright gifts and grants and scholarships from private institutions and even the government. The situation is such that most students are forced to turn towards student loans. The question is what our President is going to do about this. Is it worth all the trouble to attend college? How exactly did the government get involved in higher education funding? There are many questions to be answered.

It was through the New Deal program launched by the Congress in 1933 that the federal government started funding students through the work study program. This program was discontinued in 1943 when the economic conditions improved and it became easy for students to find part time jobs.

This program was succeeded by the GI Bill in 1944 which encompassed various aspects such as business and home mortgages, unemployment insurance and education. At least 16 million students in our country were benefited by this program.

In 1958, the National Defense Education Act provided for federal grants for universities and colleges that qualified. Work-study, loans and grants were unified by the 1965 Higher Education Act by President Lyndon Johnson. This program continues to be the cornerstone of higher education funding till today.

As the business sector continues to grow and places a huge demand for educated workforce, more students continued to invest in the higher education sector. For many of them, the only source of funds to complete college was student loans.

The recent economic turndown raised many questions and initiated many debates on affordability and other justified concerns on the quality of education students are getting for the price they pay.
Another huge concern is regarding the Stafford loan interest rate.

Rates are set to double from 3.4 to 6.8 per cent. Borrowers have to pay a whopping $1000 more for their loans. Though this amount is not considerably higher, experts feel that many families may be forced to discontinue education because of this. 

Encouraging news is that this interest hike may not happen. Last year, the Congress extended the rate hike for another year after a fight over the issue. This year, the Republican lawmakers and Obama have proposed alternates that could raise rates.

Concern over rising college costs is one of Obama’s consistent rhetoric. He stressed on including the eligibility factor in the federal student aid program to assure students of affordability as well as quality.

He pointed out to the lawmakers that it is not possible for taxpayers to continue subsidizing higher education costs. It is up to the Congress to do something and keep costs down. This is evident with his statement that taxpayer support must be reduced for colleges that do not do anything towards keeping costs down.