The student loan burden

Maine graduates have the second-highest average debt load in the country. The average debt held by college seniors who graduated in 2010 was nearly $30,000, according to the Institute for College Access & Study. About 68 percent of the 2010 graduates carried debt.

This is an especially tense time for anyone seeking or holding a student loan, given the economy and the opportunity for employment. Graduating high school seniors and their parents may wonder where to turn. Graduating college seniors may wonder how to pay off their loans. But there are some ways to prepare.

First, for high school seniors: Some may qualify for reduced or free tuition. Harvard University now offers free tuition for students whose families earn less than $60,000 a year. Stanford University offers a similar opportunity if a family makes less than $100,000.

For other students and other colleges, a good start would be an online comparison tool being developed by a new federal agency, the Consumer Financial Protection Bureau. It’s available at www.consumerfinance.gov/payingforcollege.

College graduates trying to pay back their loans might consider federal employment at one of the government agencies or on a congressional staff. Eligible staff members can receive up to $10,000 a year for a lifetime total of $60,000 in student repayments for federal loans. That program is intended to encourage students to go into public service after graduating from college.

For the 7.4 million young Americans who hold subsidized federal Stafford loans and the millions more who will need them, the future remains uncertain. President George W. Bush signed a bill in 2007 that reduced the interest rates from 6.8 to 3.4 percent. That lower rate expires July 1 unless Congress extends it.

Both parties favor extension, but they disagree about how to pay the estimated $6 billion one-year cost. The Republican-controlled House tried to kill two birds with one stone. They contrived a bill that would both position them as friends of student borrowers and kill a vital section of the Affordable Care Act.

They passed a bill to retain the interest cut and pay for it by taking money from the Prevention and Public Health Fund, a part of the act. The fund finances health-maintenance programs such as tobacco cessation and obesity prevention to promote long-run savings.

Republicans had already been trying to kill what they call “a slush fund in the president’s government takeover of health care law.” But their bill will go nowhere. President Obama has promised a veto.

And the Senate will have its own bill. Majority Leader Harry Reid said the best way to keep the loan rate from doubling would be “to close a tax loophole that allows wealthy individuals to avoid paying the same income taxes that middle-class Americans pay.” House Republicans had already approved the Ryan budget, which would allow the rates to double.

The broader question is why college expenses have risen almost five times faster than median household income since 1995. To be competitive, colleges have put up new buildings and increased the salaries of their officers and faculty. To pay for it, they have increased tuition.

And in the current lagging economic recovery, the college diploma is not the reliable ticket to career success that it used to be. With liberal arts college expenses so high, many students are turning to cheaper community colleges, raising the question about whether they offer more preparation for available jobs immediately upon graduation.

It will only benefit students and parents to be proactive. Know what your debt load and interest rates will be. Do your best to gauge whether your degree will allow you to pay off what you will owe. Take time to research the best loan options. Anyone seeking a good education should learn first how they’re going to pay for it.