Fact Check: A History of Candidate Positions on College Affordability

Senators John McCain and Barack Obama have had plenty to say about Wall Street and Main Street, but they have said little about how the economic situation makes it difficult for students who want to live on University Row. Though college students are expected to be a deciding factor in a number of states, including Virginia, the issue of college tuition barely shows up on both candidates’ radars.

When it comes to their voting records, the two candidates are almost diametrically opposed. Overall, a look at their records shows that Obama is for increasing Federal funding, tax credit and loan forgiveness for college students, often in return for public service. McCain supports more vocational training, simpler tax benefits and financial aid, as well as expanding the federal and private sector loan systems.

In late 2007, Congress passed the College Cost Reduction Act (H.R.2669), which was created to increase Pell Grants, cut interest rates on student loans, and provide loan forgiveness. The bill created $4,000 TEACH grants to encourage educators to get a four-year degree on their subject and allowed members of military services to put off loan payment, provides partial forgiveness for public servants, caps loan payments for poor students, and provides protection for students who have children or spouses. It also adjusted the income level required for a grant of federally assistance by $10,000 and provides for future adjustments. The College Cost Reduction Act was one of the largest federal aid programs for students this decade, it passed the senate 78-to-18, John McCain voted against this bill, while Obama didn’t vote at all.
One of the most important federal programs is the Pell Grant. When students submit their Free Application for Federal Student Aid (or, as it is more commonly known, FAFSA) this is one of the major grants they are applying for. Pell Grants, which are awarded through 5,400 universities and colleges, are for undergraduates and certain graduate-level programs.

During his longer tenure, McCain has voted against increasing the Pell Grant on five separate occasions. In 2005 and 2007, the two votes that occurred while both Obama and McCain were in office, Obama voted to increase Pell Grants.

Tax credit programs allow those applicable for a credit to subtract the value from their annual tax payment, or claim it as a deduction. So if you were required to pay $5,000 in taxes this year and you received the $4,000 tax credit that Obama proposes, you would only have to pay $1,000 in taxes. Many politicians, including Obama, favor providing tax credits to college students in exchange for public service. However, some college administrators state that tax credit programs force an increase in overall student tuition.

Obama’s plan includes a fully refundable credit of $4,000, which he says will cover “two-thirds the cost of tuition at the average public college or university.” Students who take this credit will be required to conduct 100 hours of public service a year. For comparison, George Mason University’s in-state tuition in 2007-08 came to $6,840 while out-of-state tuition was $19,728.
In 2009, legislation will raise Virginia’s minimum wage to $7.25. At that rate, it would take over 550 hours to earn the same amount as Obama’s $4,000 tax credit. Virginia’s average weekly wage in 2007 was $901 (that’s 10th highest in the US). If you were to work 40 hour weeks at this rate, that means around twice as many hours to earn that $4,000 then you would need doing public service under Obama’s plan.

If you thought that was confusing, you’re not the only one. McCain says he seeks to simplify tax benefits.

“I can ensure that a greater number of families have a lower tax burden when they are helping to send their children to college,” states McCain in his website’s higher education plan.

By simplify, McCain may mean eliminate. He voted against tuition credit created to cover college costs and provide tax credit incentives for teachers in 2000 (RC #182). He also voted against the Hope Scholarship Credit, meant to decrease overall attendance costs for disadvantaged children, in 2001. In both 2001 and 1999, McCain voted against making college tuition a tax deductible expense.

When it comes to community and vocational schools, Obama sees them as essential to providing local students with the skills they need and intends to reward community colleges that increase their graduates and transfers to four-year colleges. McCain focuses on retraining workers.

“We need to have education and training programs for displaced workers that work, going to our community colleges,” stated McCain in the Oct. 15 debate.
McCain’s focus on more vocational training was also seen in his support of the GEAR UP and TRIO programs. A 2006 amendment to the congressional budget proposed by Senator Kennedy sought to cut these vocational education programs and other job training programs and put their funding into student aid programs like the Pell Grant. Kennedy stated that these job training programs created $6.3 billion in corporate tax loopholes and that cutting the programs would “support college access and job training.” The senate split down the middle. Obama voted with 49 of his colleagues to cut the programs. McCain also voted with 49 others, to stop the amendment. Failing to gain a majority, it didn’t pass.

Both candidates support loans as a way to help students pay for college. Obama’s plan seeks to increase loan forgiveness, a federal program that cancels all or a portion of a student’s loan, most often in exchange for some form of public service. McCain, however, has voted against programs to provide loan forgiveness on two occasions.

Though McCain is against loan forgiveness, he does seek to change the system by increasing the availability of loans to pay for higher education.

“As far as college education is concerned, we need to make those student loans available,” McCain said, in the last presidential debate.

“John McCain has proposed an expansion of the lender-of-last resort capability of the federal student loan system and still demand the highest standard of integrity for participating private lenders,” according to the McCain campaign website.

What does that mean? A lender of last resort is an institution that only deals with clients who have the highest risk. A lender of last resort charges high interest rates to take on credit that may never be repaid. American Student Assistance, one of the largest and oldest Federal Family Education Loan agencies, sees this type of program as a last ditch measure. According to NPR, the Federal Reserve hasn’t used its powers as a lender of last resort since the 1930s, until the economic crisis now.

Private loans are used by 8 percent of students and average $7,694, according to Sallie Mae, a student lending giant. However, private student loans, known for high interest rates, have been decreasing, with more then two dozen lenders decreasing the amount available to students or cutting their programs entirely late this September. Alarmingly, a number of the major private lenders are the same banks who have collapsed in this year’s economic crisis.

Sallie Mae itself has had its stock plummet and been forced to close 20 loan offices just last week. One of the largest and best known student lenders, Sallie Mae announced this week that it will be providing fewer loans at higher prices.

This election hinges on many issues, but students aren’t getting a lot of attention. When students go out to vote this November it may radically change how they pay for college, or if they can pay at all.

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