As President Obama wrestles with the fiscal cliff, and Europe seems to be falling over its own precipice, it is useful to think again about the fundamentals of GROWTH, as growth is the only path out of our debt and deficit mess.
Everyone agrees that education is essential to growth, and to improve the prospects for mobility and employment of the middle class. Nonetheless, the U.S. makes it particularly expensive for people to obtain a college degree.
NewPopulationBomb has discussed the economic pressures faced by the middle class before, and today’s article takes a deeper look at how college tuition — and related indebtedness — fits into this calculus. Sophia Foster, an education writer who blogs about tips for success in finding an online master’s degree programs, provides an overview of what rising prices mean for American families and includes a discussion of what institutions and policymakers can do to ease the burden.
What Policy Can Do for Skyrocketing Tuition Prices at Colleges and for Masters Programs
In recent years, college and university tuition prices have skyrocketed nationwide, primarily due to cuts in supportive government funding. As a result, many young men and women who wish to gain higher education are forced to borrow large student loans – and by the time they graduate, many face crippling debt. According to an October 2012 article by Examiner.com, many students are borrowing “well over $100,000” in order to pay for school. As tuition prices have drastically risen, so have the number of graduates forced to default on their loan payments; recent figures suggest that nearly two-thirds of graduated students are unable to completely satisfy their loans.
Nor are they getting good value for their money, as experts today argue that college students are not learning as much as their predecessors. A study published last year in USA Today revealed that more than one-third of students “showed little” gains in fundamental academic skills after four years of college, while students overall spent half as much time studying as students in previous years. Not only are students paying more for college, but they are also learning less than their earlier counterparts.
The increased tuition has serious future implications, as well. Eric Pianin of The Washington Post recently noted that the current student loan crisis could cause a major debt bubble. In 2011, total student loan debt in the U.S. reached $867 billion, a figure that surpasses the nation’s collective credit card debt by more than $150 billion. Furthermore, students borrowed $104 billion from the federal government during the 2010-11 academic year – a 50-percent increase from just three years earlier. Since most students are required to begin the repayment process as early as six months after graduation – with or without a high-paying job – many are overwhelmed by their debt and left with one highly undesirable option: defaulting on loan payments.
Earlier this year, President Obama announced a new college-funding measure, whereby schools that failed to lower tuition would receive less support from the federal government. But as Robert Hansen of US News & World Report noted, the root of the tuition problem is simple supply and demand. Schools across the country, private and public, have failed to substantially boost their undergraduate enrollment numbers over the past decade. This inadequate supply of college students has failed to meet the demand brought on by a growing population and larger number of foreign student enrollments. “We simply need to give more hard working youngsters the benefit of a truly great college education,” Hansen wrote. “This will require top universities to focus not just on improving the quality of the experience for a limited number but to also increase the number of students they admit—this is more important than limiting tuition increases.”
While today’s students have little influence over university spending and enrollment policies, Jenna Woodreau of Forbes writes they can bolster their chances of post-graduation success by choosing a cost-effective major. The most valuable field of study, she says, is biomedical engineering; entry-level employees earn a median salary of $53,800, which grows an average of 82 percent over the initial 10- to 15-year period. The Bureau of Labor Statistics expects the sector to grow 61.7 percent in the coming years. Other cost-effective majors include STEM disciplines like biochemistry, computer science, software engineering and environmental engineering. On the other hand, majors considered relatively weak in the current economic climate include education, social work and religious studies.
If universities wish to benefit today’s students, then they should allocate more funding toward majors with healthy market status in order to attract more students; this would increase freshman enrollments and help to satisfy Hansen’s “demand.” Education is integral to economic prosperity – and until the student debt crisis is resolved, America’s strength in the global market will be considered tenuous. But by shifting policy toward a framework that creates more slots for freshmen and emphasizes cost-effective major programs, university officials can do their part to mitigate the issue of skyrocketing tuition.
Sophia Foster <firstname.lastname@example.org>