Unsustainable

Two thirds of the college class of 2012 borrowed to pay for their undergraduate degrees, averaging loans of $26,600 each for the pleasure of receiving that education. CBS, October 18^th. With an abysmal job market and strict anti-bankruptcy provisions enacted specifically against student loans, repayment options are clearly unpleasant realities staring these soon-to-be-graduated students in the face. The problem is that notwithstanding the massive cutbacks at state universities in staffing and facilities, often mirrored at private universities with endowment issues, the cost of getting a college education is rising much more rapidly than any semblance of inflationary cost-of-living increases.

With average American family earnings dropping in the recent recession and state institutions replacing tax dollars with tuition increases, the cost to receive an education is only creating one more polarizing factor between the haves and the have-nots. The great American mobility machine is breaking down.

But as costs have escalated, the government has stepped in to provide support for those families unable to afford to write the checks out of savings or current cash flow. The Obama administration “has sharply increased aid to low- and middle-income students, notably through the Pell Grant program, which grew from $14.6 billion given to 6 million students in 2008, to nearly $40 billion for almost 10 million students this year. His administration also made it easier to request aid, shortening the complex federal application and allowing people to transfer their financial information electronically from the Internal Revenue Service database.” New York Times, October 17^th. Congress doesn’t seem to want to increase these benefits in the current fiscal crisis, even though demand for financial aid is significant.

Conservative critics have countered that attempting to democratize access to higher education is well and good, but by subsidizing students to pay these escalating costs of college, the government has simply increased consumer demand for the product, which has in turn supported continuing and spiraling increases in costs. They argue that withdrawing that support will, under the law of supply and demand, force colleges to reduce their costs and make the long term affordability index more sustainable. Education Secretary Arne Duncan has responded that his department’s analysis has found a zero correlation between tuition increases and government-sponsored financial aid, arguing that the drop in taxpayer support has been the biggest culprit.

“College costs have risen dramatically. In the last school year, tuition, fees, room and board averaged $38,589 at private colleges, up almost $15,000 from a decade earlier, according to the College Board. At public four-year colleges, the total bill came to $17,131, up more than $8,000… But behind the headlines about soaring costs, the reality is more complex and wildly uneven, because a growing number of students receive financial aid, and only relatively high-income families pay those fast-rising sticker prices. Adjusted for inflation, the College Board calculates, the average ‘net price’ changed little over the last decade at private schools, and rose only modestly at public ones.” NY Times.

Whatever the perspective, America does better with better trained and education workers. It cannot have an economically viable future without that necessary component, but likewise, the level of cost escalations for higher education – like the costs of medical care – cannot rise at the current pace without a fundamental realignment in social strata, an acceptance of very little social mobility and a denial of opportunity that was once the signature policy of the American democracy.

We need to look behind the lines, at faculty costs, at inter-collegiate athletic programs that do not pay for themselves and admissions policies that deny opportunity while adding layer of unnecessary bureaucracy. Policy-makers also have to look at new systems to fund college education – perhaps a lifetime tax on earnings depending on the nature and level of education achieved with preliminary costs advanced by the government. Change is necessary… now… time is running out.

I’m Peter Dekom, and appropriate belt-tightening now may saving the educational systems that have supported America for decades of innovation.