This persuasive speech argues that federal student loan limits — unchanged in key respects since the 1970s and 1990s — are dangerously out of step with the real costs of a college education today. Using personal student narratives and demographic evidence, the paper demonstrates how inadequate Stafford Loan caps force students into private debt, push vulnerable populations out of higher education, and deter graduates from entering low-paying but socially vital fields such as teaching and social work. The speech closes with concrete reform proposals from the American Council on Education and the Coalition for Better Student Loans, and calls on citizens to lobby Congress for higher limits and more flexible repayment terms.
One student was initially attracted to her university for its social welfare program. However, because she is from out of state, she had to pay out-of-state tuition rates. Paying her own way through college, she soon ran into difficulty when the freshman federal loan limit of $2,625 proved inadequate to cover the tuition and living expenses of her first year. Unless federal student loan levels are increased, students in her position must choose between dropping out of school or borrowing from banks and becoming mired in debt.
Calls for increases in federal student loan limits were formerly limited to private colleges, which had more expensive tuition fees in the first place. However, even students at state and public colleges are now encountering the same problem. The costs of a college education have far outpaced the rise in student loan limits.
This speech argues that federal student loans need to be increased in order to keep a college education within the reach of all students. The first part discusses the limits of loan programs like the Stafford Loans and Pell Grants in comparison to the cost of a college education today. The next part argues that this discrepancy leads to many students dropping out of college. Others leave socially oriented occupations like education and social welfare. The resulting dropout rate and the loss of potential educators and social workers represent a significant loss to society as a whole.
Because of these factors, this speech calls on all Americans to join the coalition to increase federal student loan limits. Doing so will help ensure that a college education remains a right available to all Americans, regardless of financial status.
Students around the country are experiencing this problem firsthand. Currently, various federal loan programs place their maximum allowable amounts at very low limits — $2,625 for the first year, rising to $5,500 by senior year, with a total cap of $22,625 over an undergraduate education. These limits were set more than a decade ago and understandably lag behind current tuition costs and college living expenses.
One student recalls how inadequate the $2,625 freshman limit was for covering school-related expenses. Books alone, she noted, could cost up to $1,500 depending on the subjects taken.
In fact, limits on the Federal Stafford Loan have not changed since 1992, and the freshman loan limits have not been increased since 1972. Students are also being charged hidden costs such as the "origination fee," which adds to the loan burden of those who use the subsidized Stafford loans.
To pay for their education, many students must take on additional jobs to augment inadequate federal loans. This is particularly true for students who are working and paying their own way through college. Many of those who work longer hours or at off-campus jobs have difficulty keeping up with their academic work. Others are turning to private loans, which carry higher interest rates and more restrictive repayment conditions.
At one relatively small university, for example, 250 out of 6,000 students had already taken private loans after exceeding the federal loan limit. One student had been forced to take out $15,000 in private loans from the Sallie Mae foundation to help pay for her college tuition and living expenses. She stated that if the overall federal loan limit were increased, "then maybe more people would actually go to college, stay for four years, get their degrees, and not have to worry so much about their economic problems." This number will surely increase as the costs of education continue to rise.
Unless the federal student loan limits are increased to reflect the real expenses of colleges today, students across the country will continue to suffer.
In many ways, however, the students described above are the fortunate ones — they are still in school, pursuing the degree of their choice. A number of their peers, by contrast, have been forced to leave. Many colleges are already seeing higher dropout rates among their freshman populations. The low limits of federal student loans, particularly for first-year students, could be partly to blame. Current freshman students are also far more likely to default on their loans.
Demographic data on students taking loans shows that most of those who exceed federal loan limits are also those struggling the most to get through college. Many belong to racial and ethnic groups that are underrepresented in higher education. Furthermore, many of these students are the first in their families to attend college.
A failure to raise current federal student loan limits thus does a great disservice to these citizens. After all, even those who are not wealthy are entitled to a college education just as much as more affluent members of society. A refusal to raise the Stafford and other federal loan limits is tantamount to reserving higher education for the elite.
In addition to keeping education out of reach for low-income and working-class students, the current federal student loan limits also produce long-term detrimental effects on the rest of society. Consider the case of one student who initially enrolled in her university's prestigious education program. Having wanted to be an elementary school teacher since high school, she shocked her family when she dropped out of the education program in her junior year to study business. She stated that she still wanted to be a teacher but ultimately chose business for financial reasons — she realized that teaching in a small rural town would make it a constant struggle to pay off her $20,000 post-graduation student debt.
Examples like this illustrate how failing to make education more accessible carries high social costs. Public schools are already pointing to growing class sizes and a shortage of qualified teachers. This has significant implications for the future of the economy, which depends heavily on ensuring that the next generation of Americans is skilled and educated.
"Council and Coalition propose specific loan limit increases"
"Citizens urged to lobby Congress for reform"
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