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Students and Parents

Got Waste? Fund Students!

Have you signed the petition to show your support for the National Tuition Endowment Act?
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America's Tuition Crisis
As you know, tuition and fee increases continue to outpace both inflation and growth in the median family income. This affects students enrolled in all types of postsecondary institutions. Furthermore, the decrease in grants has led to a rise in the number of students borrowing for their education. Moreover, parents and grandparents continue to be prominent sources of tuition revenue for postsecondary institutions.

This has led millions of students and families into severe debt. Allowing students to develop severe debt significantly weakens America's economy: Adults with student loans are less likely to purchase homes and are less likely to make investments that encourage economic growth. It is clear that we are facing a national tuition crisis.


Establishing a National Tuition Endowment
In response to this crisis, student leaders from across the nation are joining together to lobby Congress for the creation of the National Tuition Endowment.

About the NTE
Learn more about the National Tuition Endowment
Where would the money come from?
Who will be eligible?
How YOU can help.


Where would the money come from?
The National Tuition Endowment would generate its money by fixing a federal student aid program that is broken. Both Republicans and Democrats agree that there are billions of dollars wasted each year which could provide millions of students access to a postsecondary education. The NTE does not ask Congress to come up with new funds; it simply asks that the waste be used to achieve a nonprofit fiscal mission. The following seven pillars outline how the National Tuition Endowment would be funded.

  1. Interest from student and parent loans. Currently, the interest from student loans goes back into the Treasury's general use. With the National Tuition Endowment Act, the money generated by student and parent loans will be redirected back to the students.
  2. Income from loan consolidations. Each year, the government makes a "profit" by consolidating student loans. Last year's profit was approximately $1 billion. The National Tuition Endowment Act will redirect this income to student scholarships.
  3. Refinancing bond rates that are currently fixed at 9.5 percent. Currently, the rates on student bonds issued by the government are fixed. By allowing multiple banks to bid for the bond, a completive market is established, guaranteeing market-value rates. By allowing a flexible rate, the government will be able to save billions of dollars, which will be redirected into the National Tuition Endowment.
  4. Remove "tax-exempt" bonds for private banks. An additional benefit for private lenders is "tax-exempt" bonds. However, as the loans are guaranteed and are essentially "risk free," there is no need to provide special incentive for private lenders. Taxing these bonds will generate millions of dollars in savings for the National Tuition Endowment.
  5. Eliminating interest charges from U.S. Treasury to Department of Education. Each year, the U.S. Treasury charges interest on the money it allocates to the Department of Education. This money is then used for student loans. Students and parents end up financing the interest. By eliminating these charges, the government will be able to offer lower rates on student loans.
  6. Eliminate government default subsidies to private banks. When the term guaranteed lending was invented, the lender was a government agency. If the student defaulted on the loan, the government "guaranteed" that the lender was repaid. Today, private, for-profit organizations receive default subsidies from the U.S. Treasury, a practice that critics call "corporate welfare." Since these loans are guaranteed, these lenders take absolutely no risk in giving out loans and have no incentive to make sure that students do not default on their loans. This costs the government billions of dollars. The National Tuition Endowment Act will redirect the current subsidy funds into scholarship money.
  7. Remove subsidies to "watchdog" agencies. Since the government currently pays default subsidies to guaranteed lenders, private lenders have no incentive to chase individuals who default. As a result, the government subsidizes "watchdog" agencies to ensure that the lenders are taking every possible step to retrieve the default money themselves. Once the National Tuition Endowment removes these subsidies, there will no longer be a need for the "watchdog" subsidies. The savings will be redirected into the National Tuition Endowment.

Learn more about the nationaltuition crisis and research our data.

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Who would be eligible?
Both graduate and undergraduate students will be eligible for the National Tuition Endowment scholarship based on need and merit.

  1. Undergraduate eligibility. Students who demonstrate financial need (by filling out the FAFSA), who are in their last two years in a four-year program, and who demonstrate merit by maintaining a 3.0 GPA in their first two years of school (including two-year public institutions) will be eligible for the scholarship. The rationale for this is simple: 67 percent of high-school graduates attend some form of postsecondary institution the year after they graduate, but only 27 percent of students complete a four-year degree. The NTE will help students finish their baccalaureate degree by eliminating financial barriers for millions of students.
  2. Graduate eligibility. Students in public-service-related fields, and who demonstrate financial need (by filling out the FAFSA) and also achieved their baccalaureate with a 3.0 GPA, will be eligible for the scholarship.

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How can you help?
Both graduate and undergraduate students will be eligible for the National Tuition Endowment scholarship based on need and merit.

  1. Support the National Tuition Endowment by signing our petition.
  2. Help us contact student government across the country by becoming a Student Ambassador. Click here to email us and include your name, email address, phone number and institution.
  3. Encourage every student government in all public and private nonprofit colleges and universities to endorse the NTE. Also, contact your local high school and ask them to sign the petition as well. If they have a student council, they can sign the National Tuition Endowment.
  4. Consider writing members of Congress, urging them to pass the National Tuition Endowment Act of 2006. Tell them your story; tell them about your family's debt load. Enter your ZIP code for their contact information. Don't know what to say? Check out our ready-to-send blurbs!

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Meet Joe, get M.A.D. and Make A Difference!

   Dr. Joe McCormick is the Executive Director of the Kentucky Higher Education Assistance Authority.

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The appearance of this website does not reflect an endorsement of the National Tuition Endowment Act by Columbia University or the Columbia University Senate.
The Columbia University Senate is hosting this Web site as a courtesy to the student members on the Student Affairs Committee.

  © 2004 Columbia University