Contrast of Contestants
Romney vs. Obama 2012
How should loans and grants be controlled?
He believes that the government should be in control of student loans. This means that the number of private lenders will decrease. Obama is a strong supporter of financial aid. A big one is Pell Grants. At the time of his second election term, he had already increased his amount of spending on Pell Grants to $41 billion as opposed to the $16 billion from before. Pell Grants are obtained through FAFSA. It is money that the student does not need to pay back. This will save roughly $7 million a year for college students as a whole. He also wants to make the repayment of loans at 10% of your discretionary income(The amount of an individual's income that is left for spending, investing or saving after taxes and personal necessities such as food, shelter, and clothing have been paid.) Obama will also be quick to loan forgiveness. After 10-20 years of reliable payment, he wants to be able to forgive your loans.
He believes that private entities do a better job of managing everything from loans to aid than the government does. He wants private lender to be the main role in college financing. With private lenders being in control, the interest rate will increase. Although interest rates will increase, government spending will decrease. Romney is also not quick to loan forgiveness. He believes that you should have to pay back whatever you took out. Romney is not a supporter of Pell Grants. He believes that Pell Grants are an example of how "flooding colleges drive tuition higher." He thinks that we should not be "writing a blank check to universities." If we keep feeding colleges with the help of government aid that is never fully paid back, they are getting nothing. They can only rely on a "blank check." Due to this, colleges raise their tuition to get more money off of what they are losing.
What are For-Profit Colleges?
For-Profit schools are operated by private, profit-seeking businesses. There are often many shareholders in a for-profit school. They go to other schools for public funds to help finance their operation. Recently, for-profit colleges have been cutting off financial aid due to three consecutive years of high-default rates or debt-to-income graduates.
Obama wants to regulate these schools by tightening their regulation. In turn to tight regulations, he wants to help provide more support. Before he takes action in this, he wants to lower how much of financial aid goes to college income annually. The rate in 2012 was 90%.
Romney believes that for-profit colleges are very important. He encourages growth of for-profit online universities. He wants to impose less regulations but provide less support. He says that "No new money is needed because more spending does not fix our problems." His main focus is on vouchers and charter schools.