The Occupy Wall Street protesters have made national news arguing on behalf of “the other 99%.” Student debt in particular is one of their biggest concerns.
Their issues with America’s education system make sense. As a 2010 economic survey revealed, in sharp contrast to the ideal of America as a “land of opportunity,” the U.S. has a much lower rate of social mobility than most European countries. One of the biggest causes of this social inequality is our system of higher education, which saddles students with ever-increasing amounts of debt that isn’t dischargeable in bankruptcy and can loom over them for most of their professional lives. Restoring the middle class starts with reforming America’s colleges and grad schools.
The bachelor’s degree has traditionally been seen as the ticket to a middle-class lifestyle, but since 1978, the price of tuition at U.S. colleges has increased by 900%, 650 points above inflation. The numbers are staggering: In 1977, the average tuition for a year at a private college was $5,000. Thirty years later, the average cost was $44,000.
With a median household income of $49,445, the average family simply cannot afford the current cost of tuition. As a result, student loan debt is projected to reach $1 trillion dollars this year, outpacing credit card debt for the first time. “In the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college,” Mark Kantrowitz, an expert on the subject, told the New York Times.
If you factor in the price of graduate school, the numbers are even scarier. The American political and economic elite tend to select from the country’s most prestigious schools. President Barack Obama, for example, spent two years at Occidental and two at Columbia in undergrad before going on to Harvard Law. How much would his academic journey cost him in 2011? Some $423,000.
When you consider that graduates of elite law schools aren’t guaranteed “Big Law” salaries that could pay down that debt, even Harvard Law might not make sense economically for the average student. The ones who do go certainly aren’t in any position to take lower-paying public-interest jobs and are going to be less likely to take career risks than rich students not crippled by debt.
As the costs of higher education continue to rise, the barriers for middle-income and low-income students get higher, giving the children of the wealthy an even bigger advantage in today’s information economy. A recent survey of college admissions officers revealed that more than half have stepped up recruitment of students capable of paying the full cost of tuition. In one telling example, Oregon’s Reed College replaced 100 students from its entering freshmen class of 2009 because they couldn’t afford the school’s $50,000 tuition.
The most perverse aspect about the rise in tuition over the last generation is that it has coincided with a dramatic boom in information technology that should have lowered the cost of education. With the internet and video technology, students can access an entire semester of lectures for almost no cost. The increasing prevalence of e-readers means that textbooks could be digitally transmitted without any cost to publishers and students.
While the costs of tuition have skyrocketed in the last forty years, the economics of teaching basic calculus and introductory writing haven’t. According to Bill Gates, web-based instruction and video technology could drop the price of a bachelor’s degree to only $2,000.
Lowering the costs of higher education would make it easier for lower- and middle-income Americans to compete in the modern workforce. Colleges love to point the finger at Wall Street and Washington, D.C. for our increasingly unequal society; it is time they looked in the mirror.Photo Credit: M00by