How to Make College More Affordable
How to Make College More Affordable
Many of the protesters occupying Wall Street and other places say they are upset about the rising price of going to college. There is little dispute today that the number of students who have debt has increased, and that the amount of money they have borrowed has gone up (Billitteri). Many students incur large amounts of debt that will never pay dividends in higher wages or greater job satisfaction, and they graduate into a world with weak employment prospects. It’s a betrayal of the American social contract that says if you work hard and invest in yourself through education, you’ll be able to build a better life. The current system is badly in need of an overhaul, and this paper will present several ways to bring about this needed change.
The seriousness of the current situation has worsened during the last few decades. Since 1982, the average cost of college tuition and fees has increased by 439 percent, while the typical family’s income has increased by a mere 147 percent (_Measuring_, 8). After adjustment for inflation, students are borrowing twice what they did a decade ago, and total higher-education debt has surpassed credit-card debt for the first time, rising to $1 trillion at the end of 2011 and continuing to climb (Cauchon).
And it’s no wonder students are feeling the pinch, when one understands the diminishing role federal grants have in providing education dollars for today’s students. “Today a federal Pell Grant covers only about one-third of what it costs for a public four-year college in-state,” says Lauren Asher, president of The Institute for College Access and Success in California. “In the 1980s it covered about half; in the 1970s it covered more than 70 percent.” (Abramson).
The reality is that for young people today, it is harder to educate one’s way into the middle class, and college costs are leaving many in this generation without the credentials they need to thrive in the 21st century economy. One radical solution that recently has been proposed is that the federal government should completely cancel student loan debt to stimulate the economy (Caffentzis, 31). However, history has shown that in the case of tax rebate checks, people tend to spend any rebates to pay off other existing debt, or they simply save them. This does little to stimulate the economy, and one suspects that the same would happen with across-the-board loan forgiveness (_Harris_).
However, there are several measures that can be taken to make college more affordable. Let’s start with the student loan and grant system. The government should increase the number of need-based Pell Grants awarded to students, but there should also be more grant money given to the students willing to chose a cheaper public college or start their academic career by attending community college. Most colleges would consequently want to keep their tuition costs low to remain attractive to prospective students. This goes hand in hand with the fact that administration costs at colleges could be cut. One reason tuition never seems to drop is that universities are not getting more efficient the way other industries are.
Today, administrators and staffers safely outnumber full-time faculty members on campus. College administrations frequently tout the fiscal advantages of using part-time, “adjunct” faculty to teach courses. They fail, however, to apply the same logic to their own ranks. Unlike businesses, which cut losing operations, colleges simply hike their tuitions (Ginsberg). In addition, private student loans could require school certification, be abolished outright, or private loans could be required to offer the same interest rates and repayment options as federal student loans. There should also be an increase in the income limits for student loan deductibility, and changes in the repayment rules.
Second, we could move the country’s tax rates back to 1950s levels. This would increase the tax burden on the wealthy, which would help to fund student grants. According to the Tax Policy Center (a joint venture of the Urban Institute and Brookings Institution), from 1950 to 1963 individuals paid 91% or 92% of their income above $200,000 to the federal government. The current rate is around 35%, where it has been for the last decade. (“_Historical_”).
Our current American business model is based upon short-term gains by building capital, and industry has successfully lobbied Washington for lower tax rates for years. However, this is arguably not sustainable in the long term because technology-based business ventures will be forced to shift back to more industrial ones if they don’t have a readily available educated workforce. Corporations that do not pay their share of taxes will eventually suffer the consequences as their ability to hire a tech-savvy, educated workforce diminishes.
Third, we currently have a bankruptcy system that does not allow student loans to be discharged, and there is no statute of limitations on collections of student debt. The government can legally garnish money from a low-income student borrower’s Social Security benefits and Earned Income Tax Credit. Garnishing money from low-income students contradicts the stated U.S. policy goal of reducing poverty, and is therefore hypocritical. Most other kinds of debts can be discharged, but not student loans. Since the beginning of the federal student loan program in 1965, the freedom to change lenders in order to find better interest terms for a loan has also been denied (Caffentzis, 35).
To single out education loans as the one type of debt that our system specifically prohibits from standard bankruptcy is wrong. Unless education debt can be forgiven through bankruptcy proceedings, as most other debt can, the system will never be fair to student borrowers. There’s no reason to treat student loan debt differently from other types of debt, other than as a gift to the banks. After all, how many other loans carry a guarantee from the federal government for payment and restrict the borrowers’ options in the way student loans do?
Lastly, colleges need to use their resources more efficiently. This includes outsourcing resources such as food operations, IT services, building maintenance, student bookstores, and recreation centers. Collaborative purchasing could be used as well. Private companies like Wal-Mart already use their enormous purchasing power to negotiate low prices from suppliers. Colleges that band together to buy goods and services can often obtain lower prices on goods and services used, than if they buy separately.
On the teaching front, more classes could be taught online. Not all instruction can be offered effectively on-line, but large numbers of students can benefit from the savings by reduced commuting and room-and-board costs. In addition, libraries could be encouraged to digitize their holdings, and professors could be required to select textbooks that are also available in e-book format and are usually cheaper (“_25_”).
We need to re-evaluate our country’s spending priorities, and recognize that global competiveness will be increasingly based around our ability as a nation to compete in a technologically advancing world. The current cost of higher education puts our future prosperity as a nation at risk. If our populace is not educated, we will not remain competitive in an increasingly global marketplace. Many other countries already provide free or heavily subsidized inexpensive university education. In order to be competitive in a global economy, the US must do the same.
Abramson, Larry. “Why Is College So Expensive?” _NPR.org_. National Public Radio, 25 Nov. 2011. Web. 26 Nov. 2011.
Billitteri, Thomas. “Student Debt,” _CQ Researcher_ 21 Oct. 2011: 877-900. Web. 26 Nov. 2011.
Caffentzis, George. “The Student Loan Debt Abolition Movement in the United States.” _Reclamations Journal_ Aug/Sept. 2011: 31-41. Web 27 Nov. 2011.
Cauchon, Dennis. “Student Loans Outstanding Will Exceed $1 Trillion This Year.” _USA Today_ 25 Oct. 2011: B1. Web. 26 Nov. 2011.
Ginsberg, Benjamin. “Administrators Ate My Tuition.” _Washington Monthly_ Sept/Oct. 2011. Web. 25 Nov. 2011.
_The Harris Poll®_ September 10, 2008, “Rebate Checks: No Economic Stimulus” Web. 2 Dec. 2011.
_Historical Top Tax Rate_. Chart. Tax Policy Center. 31 Jan. 2011. Web. 25 Nov. 2011.
_Measuring Up 2008_. The National Center for Public Policy and Higher Education_._ Web. 26 Nov. 2011.
_25 Ways to Reduce the Cost of College_. The Center for College Affordability and Productivity. Web. 1 Dec. 2011.