Here it is–Iowa Caucus day 2020. In this topsy-turvy field of democratic candidates (obviously the republican candidate is already settled), we’ll be watching the winnowing begin. Student debt has been one of the top issues for many of the candidates, and I have been watching with interest as various plans for reform are put forward. While I do not have anything to say about the plans, such as they are, I do want to focus on some issues that are salient for me.
The structure of our economy, coupled with the cost of housing, means that most people cannot achieve a measure of economic stability without some level of post-secondary education. What that post-secondary education consists of can vary widely, but as a society, we must acknowledge that a high school diploma no longer carries any real advantage. To help people help themselves, we must support affordable post-secondary education.
Affordable has two important variables, where one starts and where one hopes to end up. Where one starts is all about the assets we can leverage to go to college. Those assets have to do with our K-12 experiences (did we have access to quality college preparatory curriculum or will we need remedial education), our socio-cultural experiences (has anyone in our family/neighborhood ever attended college or do we have to figure it all out on our own), and our economic status (can we pay tuition? can we afford not to work full-time?). Policy proposals surrounding higher education need to take these questions into account, because they answers have everything to do with student debt. Less-preparation, more time working, and even cultural adjustments generally add time to degree completion. Time to degree completion drives up cost.
Where one hopes to end up has to do with the potential earnings associated with one’s college degree. This is not a simple equation. Investing in nursing, or education, or accounting degrees may have a pretty clear return on investment, (if you don’t overspend to achieve them) but most degrees do not. Working in public service careers generally means earning less than in the private sector, but not always. A good education in entrepreneurship does not a millionaire make. It simply prepares students for the changing world of work. So does a degree in literature. For advanced degrees, it may make more sense to align cost with earnings potential, but at the undergraduate level, it just does not add up. Given this complexity, perhaps it is the cost of the undergraduate degrees that we should focus on, not the earnings potential of particular majors.
Much of the college debt conversation in the press features extravagant and often unnecessary borrowing. It makes a good news story to focus on the student who took out $150,000-200,000 in student loans and now cannot afford to live reasonable lives. This is a lot of debt, but those loans frequently reflect some unfortunate decisions, most of them motivated by an obsession with brand recognition. Social pressures and guidance counselor recommendations inspire students to pursue degrees at private colleges and universities, when families do not have sufficient resources to support attendance at those schools. Borrowing to attend many privates can easily top $150,000. Yet, there are many public alternatives with the same curriculum and leading to the same certifications. Let’s try to stop the debt before it happens, by focusing on the public options. We should celebrate the investment we have made in public higher education and the opportunities it provides, instead of convincing students that a lot of debt for comparable private school experience is necessary.
While public colleges and universities are relatively affordable, and our system of Pell Grants is admirable, we are still too expensive for many families. Remember, we have increased the credential requirements for a reasonable standard of living, so more people must go to college. This means many families who might not have ever considered post-secondary education now feel compelled to provide it. They are not likely to have amassed sufficient savings to support a college degree. If we simply take the basic model, where students live with their parents while in college, then the costs per year at a public college in the northeastern US is somewhere between $8,000-$14,000 per year (considering fees and books, etc.). If families want their students to have a residential experience, then we are talking about an additional $10-12,000 per year. This could easily get a student to $80,000-100,000 in debt. It is not the norm, though. Most opt to commute and save on the housing. There is actually quite a lot of responsible borrowing. But, how much is reasonable? What level of interest should a student pay on that debt? These are the important questions. What is a reasonable return on investment based on the typical, not the exceptions?
What is clear to me is that I am looking for a candidate with a demonstrated commitment to public higher education. Seventy-four percent of all students attend public higher education institutions. These institutions do their very best to meet the needs of a diverse student body, by combining support for the least prepared students, with opportunities for the most-prepared students, all with the same finish line in view. They are non-profit, which frees them to focus on the best interest of the students, not the bottom line. Unfortunately, public institutions have faced funding cuts for over a decade and these have been passed on to our students. Those cuts are a huge driver of student debt. So, let’s fund public higher education at a level that does reduce debt. Let’s invest wisely in these engines of opportunity, because we know that we need to education the majority, not the lucky few. Let’s commit to creating opportunities for all because the return on that investment will benefit the whole of our society.