The Class of 2011 will graduate this spring from America’s colleges and universities with a dubious distinction: the most indebted ever.Even as the average U.S. household pares down its debts, the new degree-holders who represent the country’s best hope for future prosperity are headed in the opposite direction. With tuition rising at an annual rate of about 5% and cash-strapped parents less able to help, the mean student-debt burden at graduation will reach nearly $18,000 this year, estimates Mark Kantrowitz, publisher of student-aid websites Fastweb.com and FinAid.org. Together with loans parents take on to finance their children’s college educations — loans that the students often pay themselves – the estimate comes to about $22,900. That’s 8% more than last year and, in inflation-adjusted terms, 47% more than a decade ago.
In the long run, the investment is probably worth it. Education is a much better reason to borrow money than buying cars or McMansions, and it endows people with economic advantages that the recession and slow recovery have only accentuated. As of 2009, the annual pre-tax income of households headed by people with at least a college degree exceeded that of less-educated households by 101%, up from 91% in 2006. As of April, the unemployment rate among college graduates stood at 4.5%, compared to 9.7% for those with only a high-school diploma and 14.6% for those who never finished high school.
US higher education policy is a cruel joke. Public universities -- which use to be a great bargain -- have slowly shifted the cost onto students backs. I did a ton of research on this a few years ago, and the basic culprit was state governments slowly cutting funding, which left students picking up the tab.
This is something that has to change. Period.
9 comments:
"This is something that has to change. Period."
I agree with your general sentiment, but have yet to find viable solutions offered by anyone. The overall problem seems extremely complex, laden with bureaucratic impediments and political posturing.
Given your "ton of research" what is the most effective set of solutions you suggest?
The solution is simple, WSM:
Free, taxpayer-subsidised, Higher or Vocational Education to anyone with a Social Security card who matriculates at a nationally-accredited institution in a degree-granting program at least half-time while maintaining a reasonable GPA.
This would be one government investment program that pays for itself many times over in a multitude of ways. Too much education rarely goes to waste.
Hmmm....but you said the problem was "state governments slowly cutting funding". If the gov't already doesn't have the money to even fund the PARTIAL cost, how in the world will it ante up to cover the FULL cost?
When the federal government can borrow long-term at near-zero interest rates to pay for this kind of high-return investment, its damn-near criminal not to do so in this time of prolonged, high, unemployment.
Borrow cheap and invest long is wise policy in tough times, both for business and especially for government.
I am not saying I disagree with your notion, but to summarize, your 'solution' is for the federal gov't to borrow enough money to FULLY subsidize any and all higher education for qualifying citizens. But this suggestion is politically untenable, given the context of the fiscal reality in which we reside.
You asked for a viable solution and I gave you one. That some politicians would rather help badly-managed corporations than unemployed people in these tough times is mind-bogglingly short-sighted of them, and I'd like to think that their opponents could make mincemeat of them come election day. Alas, that would require courage. --sigh--
Agreed.
Thanks so much for this! I haven't been this moved by a blog for a long time! You’ve got it, whatever that means in blogging. Anyway, You are definitely someone that has something to say that people need to hear. Keep up the good work. Keep on inspiring the people!
regards:
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I think that Jimdotz's solution is very viable especially for those with disability and background in poverty. I also believe that increasing financial IQ should also be a part of mandatory courses in higher education because the sheer ignorance of American people in understanding investment and finance while being mired in debts is bringing the economy of American to its knees and causing harms at all level, including wage inequality.
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