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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Oct 25, 2012

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The 2008 election was greatly influenced by student voters, and if this upcoming election on Nov. 6 stays true to predictions, it will be no different.

Mark Kantrowitz, the founder of FinAid.org and an expert on paying for college, said student voters have the potential to sway both the Presidential election as well as the Congressional races.

“Students tend to vote when they are personally affected by the outcome of an election,” Kantrowitz said in the NY Times. “The major concerns of college students and their families include persistent high employment, decreases in college affordability, increases in the student loan burden and possible cuts in college grants and education tax benefits.”

While the election will be based upon varying topics, the current and future status of higher education is a subject that neither candidate can afford to ignore.

Federal Family Education Loan

During his time in office, President Obama ended the Federal Family Education Loan program (FFEL) which derived some federal student loans through private lending institutions. By ending the FFEL, all federal student loans are now handled through the Department of Education. The Obama campaign estimates this will save $68 billion over 10 years in private sector subsidies. Due to the transition, many banks and lenders stopped offering student loans, making it potentially more difficult to secure a private loan when federal student loans are not sufficient.

Governor Romney counters Obama’s opinion and seeks to increase the private industry’s role in higher education. Romney proposed increasing the presence of private lending institutions; some of which would be financed by the federal government such as under the FFEL program.

The Dream Act

The Dream Act would allow undocumented students who arrived in the country more than five years ago to apply for conditional permanent residency. There are several objectives that undocumented residents would need to finish, such as attending college or enrolling in the military during a six-year period. During this time, they would be eligible for federal student loans and federal work-study programs. After six years, if the residents were able to pass the requirements, they would qualify for permanent residency.

President Obama supports the passage of the Dream Act while Romney said he will veto the Act. In response to a voter’s questions last year, Romney stated, “For those that come here illegally, the idea of giving them in-state tuition credit or other special benefits I find to be the contrary to the idea of a nation of law. If I’m the President of the United States I want to end illegal immigration so that we can protect legal immigration.”

Although the Dream Act does offer federal student loans and programs, it does not offer any federal grant funding.

The Pell Grant

The Pell Grant is one of the largest sources of grants in the country and is sponsored by the U.S. Department of Education. Beyond federal student loans, it was designed to help students pay for college. Under Obama’s presidency, the Health Care and Education Reconciliation Act of 2010 set a low monetary limit for each Pell Grant that extends until 2020. Problematically, Congress did not fund the small increases which strained the entire program. Although the grants are protected for the next two years, the program will have automatic cuts of about eight percent in 2014, making it impossible to stay afloat with the current trajectory of increasing college costs. 

President Obama’s views on the Pell Grant are clear. He is committed to the grant, and even proposed an $85 increase in the maximum Pell Grant, taking it to $5,635. He wants to keep the grant program in order to assist with federal student loans.

Governor Romney proposed keeping the maximum grant at the current rate and reducing eligibility for the grants. Romney also proposed to switch the program’s funding from its current mixture of mandatory and discretionary funding, and shift solely to discretionary funding. This would make a future program cut easier to enact.

A Reason to Agree

While both candidates disagree on many aspects and plans for assisting past, present and future students, there is one area of agreement: the cost of an education. Both parties believe something must be done to stop the growing cost of college. Although Obama and Romney have differing opinions how this should be implemented, it is at least a starting point for change.