$422,320 for a College Degree? With Tuition Skyrocketing, It is Time to Rethink Higher Education
That's what The Daily, News Corp. and Apple's daily news outlet for the iPad, calculated a college education could cost members of the class of 2034—children born this year, for the most part—if they attend one of the nation's priciest schools. But even an average public university will cost $81,000 for four years if tuition hikes continue at current rates—which are increasing much faster than inflation. As tuition continues to go up, and even the president calls for solutions, some are looking at radical possibilities for keeping tuition down—or even eliminating it.
The Daily found that tuition has been increasing even faster at public schools than private—4.5 percent a year for public universities and only 3.5 percent for private. According to Jane Wellman of the Delta Project, which studies the cost of higher education, public schools have been relying on tuition rather than endowments to make up for state education budget cuts..
That last statement shouldn't be surprising—with the Age of Austerity upon us, cuts have been coming fast and hard to state university budgets. Last year, the University of California system saw a $500 million reduction in the support it gets from Sacramento, a 16.4 percent drop.
With support for public universities dwindling in the ongoing economic slump, the cost of college is falling on the shoulders of families and on the students themselves, who are increasingly forced to mortgage their future on student loans that will follow them for the rest of their lives.
Family incomes certainly haven't kept up with the rise in college costs—The Daily notes that family incomes, adjusted for inflation have only grown by 1 percent since 1987, and the median family wage is down from 2009. Poverty is at an 18-year high. And while Rick Santorum might be attempting to burnish his working-class credentials telling audiences that President Obama is a “snob” for saying that he wants everyone to go to college, Catherine Rampell at the New York Times notes that college graduates' incomes are actually going up in comparison to those of high school grads.
A professor that Rampell interviewed, Philip Babcock from the University of California at Santa Barbara, noted that perhaps it's less that incomes are going up for people with degrees and more that incomes are stagnating or dropping for those without them. Rampell wrote, “Additionally, some public policies that helped support the earnings of lower-skilled workers have become less generous over time. The minimum wage, for example, has not kept pace with inflation.”
The decline of unions, the outsourcing of manufacturing jobs that used to provide a solid middle-class income and benefits, and conservative politicians refusing to maintain the minimum wage against inflation have all contributed to a situation where a college education is seen, despite Santorum's posturing, as the best way for young people to guarantee a good future. Yet if the price of a college education continues to rise above and beyond what working families can afford, we end up with two results: one, that the children of the already-wealthy get the benefits of advanced degrees without debt (how many families can afford to spend $20,000 a year putting a kid through school without taking out loans?) and two, that big banks and student lenders will continue to reap the rewards, raking in interest as they dish out loans to “the 99%.”
An Alternative Plan?
Last month, President Obama and education secretary Arne Duncan met with a group of college presidents (mostly from public universities) and others, including the Delta Project's Jane Wellman, to discuss ways of keeping college tuition down and improving graduation rates.
Wellman told the New York Times, “It was an unusually interesting meeting, and not your usual list of college presidents. These were all people who had led institutions that had done something about reducing spending or improving student learning.”
“There was good discussion on how we drive down tuition, and what the right role is for the federal government,” she continued.
To really discuss the role of the federal government in controlling tuitions, the government would first have to take a look at how its policies are already shaping the cost of education.
Mike Konczal at the Roosevelt Institute noted that the federal government has many hidden subsidies for student borrowers in the tax code, from $1.4 billion that goes to making student loan interest tax-deductible to $5.4 billion for the HOPE tax credit, which provides a federal income tax break for the first $4000 spent on higher education in a given year. All told, Konczal wrote, it adds up to some $22.75 billion that the federal government is paying through the tax code to help students buy their education.
What's wrong with this? Konczal explained:
“When we subsidize through the tax code, people who are well off and pay more taxes benefit more....These subsidies benefit private educational institutions over public ones, as they’ll make private education feel more 'natural' while obscuring the role of the government in setting up these markets. ….
The subsidy approach replaces the claim to a necessary good to be full, participating citizens in our market economy with the claim of a consumer, whose claim is ultimately one of willingness to pay either through wealth or debt.”
In other words, the hidden subsidies are not helping those who most need help in getting a degree. It's also helping lenders, by providing an incentive to borrow. So why not take that $22.75 billion or so that we're already spending and putting it directly toward making public higher education free. In his new book, Jeffrey Sachs estimated the cost of making all public colleges free at between $15 and $30 billion a year, so if he's right, that's not much of a stretch from what we're already paying.
The odds of this government deciding to simply make tuition free at public universities are probably slim to none. But JW Mason, at The Slack Wire, made a convincing argument for directly spending on public schools in order to bring down tuition across the board, comparing public schools to the idea of a public health care option.
Grants and scholarships given to some students don't drive down the cost of tuition overall; the students who don't receive them pay just as much as they ever did. On the other hand, Mason argued:
“[W]hen public funds are used to reduce tuition at a public university, they don't just lower costs for students at that particular university. They also lower costs at unsubsidized universities by forcing them to hold down tuition to compete. So while each dollar spent on grants to students reduces final tuition costs less than one for one, each dollar spent on subsidies to public institutions reduces tuition costs by more.”
The Obama administration has already taken steps to change the way college is funded by taking on the student lending process—directly lending up to $31,000 to students rather than subsidizing, as the government did previously, loans provided by private lenders. There's a solid argument to be made for putting some federal money into keeping tuition lower in the first place, rather than using the tax code to indirectly subsidize private higher education and the big lenders already getting rich off of student debt. Providing free or low-cost public universities would actually help those who need the help the most, and also provide pressure for private institutions to find ways to hold down tuition costs.
The president and education secretary claim to be serious about keeping the price of college low enough for everyone to be able to afford. That's a good thing, because unless steps are taken now to hold down the cost of an education, the current $1 trillion student debt bubble is going to look small eighteen years from now—and the only ones able to go to school will be the children of the 1%.