At our local college, some students have gone without food.

You may not think President Obama’s proposal to make community college tuition-free for millions of students is very remarkable. In order to understand why it is important, I am afraid that Aussies (and my other readers in the UK, Germany, Pakistan,…hi!) will have to endure a mini lecture.

Let’s start with a vocabulary lesson. If a young American tells you that they are ‘going to school’ it does not mean that they were such hopeless students that they are still in high school. Any student in any learning institution is in ‘school’. Students also say they are ‘going to college’ whether they are actually attending a college or not – it just means they are studying somewhere more advanced than secondary school.

The distinction between colleges and universities is even more confusing. Here’s a quick run-down: university and four year colleges both award bachelor’s degrees. Two-year colleges offer associate degrees, and also certificates (usually for trade-based programs). You can start many bachelor’s degrees at a two year college and transfer to a university at the end of the two years.

College courses have the same content as university courses, but are cheaper. Our local college, the Allegany College of Maryland, charges $110 per credit hour for residents of Maryland, or $3300 per year, whereas the local university charges $5630, around 40 per cent more. University of Maryland course fees are around $8,000 per annum. (These charges are for residents of the state in which the institution is located. They are usually higher for out-of-state enrolments). Fees sky rocket after that, with private colleges charging tuition fees of up to $50,000 per year.  There are student loans available, but even with loans and low fees, many prospective students decide not to apply because of they are reluctant to accumulate debts on already low salaries. Affordability and student loan debt is still a barrier to higher education.

Students in the community college system typically hold down jobs as well as study; many work full time on top of their class load. A majority have small children. They are all strapped for cash – few have cars and those that do have bangers. At our local college, some students have gone without food.  Many have chronic illnesses.

Costs for college and university in the U.S. are way higher than in other countries, and nowhere else do loans cover so much of those costs- there is currently $1.2 trillion in outstanding education debt.

Obama’s proposal would cover half-time and full-time students who maintain a 2.5 grade point average — about a C-plus — and who

All citizens and permanent residents attending universities in Australia qualify for government loans which are repaid  only when the former student has income to support the repayments. The debt does not attract normal interest, but grows with CPI inflation.

There is no requirement to “make steady progress toward completing a program”. Perhaps there should be.

US college students – Envy alert!

A warning to American university and college students! If you are prone to attacks of envy, don’t read this!

The Australian government grants loans that cover virtually all tertiary tuition fees to all permanent residents. The loans are not repayable until your taxable income reaches about $50,000, and then the repayments are garnished at rates ranging from 4 to 8 percent of total income. The government does charge interest on the loans – set at cost of living increases, which means that the debt carries a real rate of interest of zero. And when you die, the loan dies with you.

Outstanding student debt in the US is now more than $1.8 trillion.  Since 2003 student loan size has increased from $17,233 in 2005 to $27,253. A 58% increase in just seven years, while credit card debt and auto debt have decreased.Compared to the other countries the US requires much higher payments from borrowers who are below median income.

Even if you have no sympathy for students, this is contributing to losses by retailers. Student debt is causing young Americans to put off buying houses, cars, and much else.  Low-income and middle class retailers including Wal-Mart, JCPenney, Target, Macy’s, and Family Dollar have reported disappointing earnings this year. People are buying close to need.

Changing the US system would be good economically, as well as ethically.