Even with Low of No Tuition, Higher Education is Still Often Unaffordable

 

Post-high school education is expensive no matter how you look at it: “The cost of college has steadily increased over the last 30 years. In that timeframe, tuition costs at public four-year colleges grew from $4,160 to $10,740 and from $19,360 to $38,070 at private nonprofit institutions (adjusted for inflation). As costs have risen, so has the need for student loans and other forms of financial aid… Today, more than half of students leave school with debt… $1.75 trillion in total student loan debt (including federal and private loans) – [more than our aggregate credit card debt]… $28,950 owed per borrower on average.” Forbes.com, June 9th.

Students with advanced professional degrees (law, medicine and business) fare much worse. “[Such debt is] $66,300 for an MBA, $71,000 for a master’s degree, $145,500 for a law degree and $201,490 for a medical degree… It is regularly argued that graduate students take on more loans because they can expect to earn more, which is often true. Workers with master’s degrees earn $1,545 per week on average and workers with a professional degree (such as a JD or a MD) earn $1,893 per week on average, the Bureau of Labor Statistics estimates… However, those with a just bachelor’s degree earn closer to $1,305 per week and those with a just high school degree earn closer to $781 per week on average. Workers with advanced degrees also have significantly lower unemployment rates.”

However, high student debt is a disincentive to those willing to go into lower-paying jobs targeting aid to lower or impoverished Americans. The notion of forgiveness of student loans for those holding public service jobs for a decade or more vaporized under the Trump era, where Education Secretary Betsy DeVos simply disallowed that provision. We need more doctors, but with staggering debt, they are often forced to pursue money over service. Half the collective student debt is attributed to post-undergraduate studies.

Yet higher education, across the board, is one of the most significant foundation building blocks for innovation and higher-end, higher-paying jobs. Advanced education yields advanced technology which generates the jobs. We simply cannot remotely produce enough STEM students to meet the needs of hi-tech companies. They have come to rely on immigrants who account for the creation of a disproportionate number of the best jobs in the country, notwithstanding arguments to the contrary.

“‘The idea is that immigrants come to your community and they take jobs,’ says Ben Jones, a professor of strategy at Kellogg [School of Business, Northwestern University]. ‘That could mean that people already in the community could have more trouble finding a job or, by having to compete with immigrants for jobs, could get paid a lower wage.’… The logic is straightforward. Yet curiously, the economic data have not generally borne this out. Previous studies have not found lower local wages after influxes of immigration. In fact, regions of the U.S. that have historically seen more immigration have actually experienced higher gains in per-capita income. ‘They seem to be the outperformers,’ says Jones.

“So what is going on?... Jones and his colleagues wondered if economists and policymakers had been focusing too much on immigrants as employees in the labor pool—and not enough on the role they also play as job creators: entrepreneurs who might start and grow lucrative companies, ultimately employing large numbers of people. The conspicuously high number of immigrant founders in Silicon Valley, including prominent examples such as Sergei Brin and Elon Musk, suggests the potential importance of this view… ‘Ironically, the result [of immigration] is exactly the opposite of the usual narrative. It seems like immigrants actually improve the economic outcomes for native-born workers,’ [said Ben Jones.]” KelloggInsight.Northwestern.edu, October 5, 2020. Bottom line, if you want better jobs with higher pay, seed that reality with affordable higher education.

Germany, the European Union economic powerhouse, provides a model for us to examine: “In 2014, Germany’s 16 states abolished tuition fees for undergraduate students at all public German universities. This means that currently both domestic and international undergraduates at public universities in Germany can study for free, with just a small fee to cover administration and other costs per semester… [One state, In autumn 2017 the south-west state of Baden-Württemberg reintroduced tuition fees for non-EU students]..

“While many students can study in Germany for free, living expenses are unavoidable. The cost of living in Germany is more expensive in some areas than others – Munich, for example, is considered the most expensive German city to live in, with living costs averaging about €12,000 (~US$13,900) per year. By comparison, the average annual living costs in Germany are around €10,200 (~US$11,800).” TopUniversities.com, December 20, 2021

The sharpest blade in that cutting edge of technological growth is graduate school. As the above suggests, tuition is only part of the cost of higher education. For those in grad school, even with tuition subsidies, the mere cost of living plus mega-expensive textbooks, is often softened by a paid engagement as instructors and teaching assistants, which is even more important for students (usually in STEM fields) from countries with very low levels of disposable income.

Writing for the June 13th Los Angeles Times, Parth M.N. and Liam Dillon, provide a common example: “When Sally Ireri moved to California from Nairobi, Kenya, five years ago, she didn’t expect life to be this difficult. Studying for a doctoral degree in mosquito genetics at UC Riverside, Ireri has had to borrow money and car rides from friends because she makes less than $30,000 a year from teaching.

“She lives in a three-bedroom home with two roommates for $750 a month, a rent that’s well below average for the region but still one that eats up a sizable portion of her paycheck. After she graduates, Ireri wants to remain in California to be at the forefront of research that could assist Kenyans in fighting mosquito-borne diseases… But what she’ll need to pay every month to keep a roof over her head is holding her back… ‘I don’t know if I can afford to stay here,’ said Ireri, 28. ‘I’ve made a community in the past five years, and if I have to leave, it’ll be sad.’”

The Guardian (UK), March 30, 2022 adds: “For international students, they legally cannot work additional jobs while working as a graduate student worker. Simon Luo, a PhD candidate in political science at Indiana University Bloomington and international graduate worker, is paid just $19,000 a year… ‘This is thousands of dollars below the minimum living wage in Bloomington, Indiana. I’m constantly unable to make ends meet,’ said Luo. ‘Not being able to support myself financially means constantly confronting the financial anxiety brought by low income.’ [This fate applies to native born grad students, the bulk of such students.]

“Salaries for graduate student workers vary widely around the US. In January 2022, Princeton University announced raises for graduate worker stipends of 25% to about $40,000 annually and Brown University recently raised base annual stipends to over $42,000 annually, while many colleges and universities pay stipends of far less than $20,000 annually… Pay can often vary for graduate student workers depending on academic departments and alternative sources of funding and grants. This pay has remained low at universities and colleges around the US, despite university endowments soaring in 2021, with an average return of nearly 31%, the highest average returns since 1983. About 19% of colleges and universities that reported endowment returns in 2021 had endowments worth more than $1bn each.

“At the University at Buffalo in New York, pay for some graduate workers can be as low as $10,500 annually, noted Lawrence Mullen, a PhD student worker in the English department at the University at Buffalo and president of UB graduate student employees union. He cited an internal survey of graduate workers at UB conducted by the union, which found around 20% of graduate workers at the school were making less than $15,000 annually… ‘They are paying our graduate workers less than a living wage and in some cases, a third of what is the living wage in Erie county, which, according to the Economic Policy Institute, is about $35,000,’ said Mullen. ‘At UB, we have a food bank, and last semester, fall 2021, 80% of the people who used that food bank were graduate students.’” With the recent rising outright populist antagonism toward educated elites, we are shooting ourselves in the foot (and more) by not emphasizing higher education… if sustainable long-term economic success is our collective goal.

I’m Peter Dekom, and if the United States won’t invest in higher education, it will not generate the desperately needed return on that investment.