“the Student Loan Crisis And Its Implications For Economic Growth”

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“the Student Loan Crisis And Its Implications For Economic Growth”

Commentators, politicians and journalists have plunged themselves – and, in turn, the public – into a persistent state of panic about the future of higher education with scary talk about spiraling student loan debt, worthless degrees and reckless spending by students. college.

Student Loan Scandal Silent No More

But the condemnation is exaggerated. American higher education is by no means a disaster area and is unlikely to become one in the foreseeable future. Yes, the system has serious flaws and faces significant challenges, but the biggest challenges tend not to be the ones that generate the most excitement. Panic is rarely a desirable state of mind for identifying or solving problems. Clearing out the undergrowth of scaremongering claims can help us focus more effectively on the real problems of higher education while also recognizing its significant strengths.

Here are four myths that frequently recur in commentary about American higher education (followed by four significant issues that suffer from neglect in the current panicked discussion):

Forty percent of public university students owe nothing when they graduate, and the vast majority of people with six-figure higher education loans went on to graduate or professional school, often funding medical, dental, or other medical degrees. other type that could lead to very good incomes. Among the 60 percent of public college degree recipients in 2013-14 who borrowed, the median amount was $25,500.

Powerful new data from the US Treasury Department makes it clear that the people most likely to get into trouble with debt are those who dropped out of college before earning a credential and therefore have dim job prospects. Often they have borrowed relatively little money but have few resources and no doubt little enthusiasm to pay back what they owe. Dropouts are almost three times more likely to default than college graduates. It is the debt of this subgroup that should be driving the conversation, not the debt of the “average” college student.

Free College Won’t Solve The Student Loan Crisis

Than others require. The free tuition won’t let a single mom quit her job and go to college full-time (the path that would give her the best chance of finishing), nor will it let the young Native American from a poor family go to State U instead of stay at home earn money to help out around the house.

Disadvantaged students need substantial help with living expenses and tuition fees. Meanwhile — an oft-repeated point still worth emphasizing — there’s definitely no reason why the kids of Donald Trump, or Chelsea Clinton, should go to college for free. But there’s also no reason why a two-income family with a child generating a combined income of $110,000 a year (well above the national average) shouldn’t contribute at least a couple thousand dollars a year. year to your child’s education. We are all in this together.

If we want our least advantaged people to have a fair chance of success, we all need restraint in asserting our privileges. Furthermore, there is no reason why students themselves, who will reap significant benefits from investing in education: The average college graduate aged 25-29 earns about $20,000 more annually than the average college graduate age, and the gap continues to grow with age – they wouldn’t have to repay part of the cost through loans once they enter the workforce.

College degrees, and especially graduate degrees, pay off big time. It is certainly a mistake to think that the purpose of life, or of college, is to make as much money as possible, but there is nothing foolish about expecting a substantial investment of time and money in one’s future to offer the prospect of a better material life.

The Student Loan Crisis Everyone Saw Coming

The financial crash has spawned many stories about recent graduates being unemployed or taking so-called non-college jobs. In reality, though, for decades the unemployment rate for people with only a high school diploma has been consistently about double that for those with college degrees. In 2015, 5.4% of high school graduates age 25 and older were unemployed, compared to 2.8% of BA holders. The figure for those with advanced degrees was even lower. Additionally, recent years have seen the highest BA to high school earnings ratio in history. The worst outcomes occur for those with only a high school diploma or less.

Naturally, some high school graduates will earn more than many college graduates, and some graduates will end up with very disappointing careers. But as Damon Runyan once said, “The race isn’t always for the fast nor the battle for the strong, but that’s how smart money wagers.” On balance, getting a BA pays off.

It is the failure of state government funding to keep up with enrollment growth. In most public higher education, the number of non-teaching staff has actually decreased modestly over the last few decades, while the faculty-to-student ratio has actually increased slightly.

University leaders aren’t the idea of ​​any efficiency expert, but public colleges and universities have indeed tightened their belts. And no wonder, when we see that government spending on higher education per student declined in real terms by 14% from 2005 to 2015. The tightening of the belt that has taken place has not been nearly adequate to balance college budgets in the face of this huge drop in revenue. Colleges have tried to make up the difference by raising prices.

Throwing Money At Colleges Is No Answer. A Gop Proposal Can Actually Address The Student Loan Crisis

Unfortunately, state governments don’t turn out to be a very satisfying villain for those looking to scapegoat higher tuition. It’s not that states have aimed to punish universities — at least outside of Wisconsin — but rather that growing enrollment demand has pushed against other major pressures on state finances, including rising Medicaid costs, for primary and secondary education and a popular climate that is highly resistant to tax increases. These pressures are unlikely to reverse in the foreseeable future. The search for someone more satisfying to blame – like rapacious deans – may help explain why a writer like law professor Paul Campos has pieced together a staggeringly inconsistent set of data in The New York Times – a salad of numbers – to make a totally unconvincing case for administrative deception. Why The Times chose to publish it is harder to explain.

Bernie Sanders introduced the idea of ​​free lessons to the democratic race. Hillary Clinton followed his example. Getty

Incomplete college programs waste students time and money, and often lead to little or no benefit to them or society. The census reports that for the population between the ages of 25 and 34, a college graduate has a median annual income about $20,000 more than a high school graduate. But a student who has college but no college degree makes only $2,000 compared to the high school graduate. College access — helping more people get into a decent college in the first place — is by no means a solved problem in this nation. But improving success—reducing the extent to which people who start a degree or certificate program walk away with nothing—is a more serious problem at this point than initial access.

America is still the best educated society in the world, but recent generations aren’t keeping that record as other countries raise entry rates while keeping completion rates higher than ours. Most disturbingly, graduation rates are much lower for students from disadvantaged economic, racial and ethnic backgrounds than for others, and these are the groups whose members depend most on education for social advancement . No doubt this stems in part from educational opportunities lacking in early levels of education, but there is growing evidence that systematic, intensive and data-aware reforms in post-secondary institutions can measurably improve outcomes.

Loan Forgiveness: How Student Debt In The U.s. Has Skyrocketed

A serious difficulty is that students from disadvantaged backgrounds generally have less money spent on their education than their better educated and better funded peers.

While it’s hard to get a perfect apples-to-apples comparison, spending per student is about twice as high at public research universities as it is at community colleges, which disproportionately serve underprivileged individuals. Even bachelor’s and master’s institutions spend about 50 percent more on each student than community colleges. And nearly all of the proven programs that boost completion rates for students at broad-access colleges, like the celebrated Accelerated Study in Associates programs at CUNY, cost non-trivial amounts of money. Allocating money to schools and programs that help poor students is incomparably more important than reducing the debt burden of upper-middle-class graduates of good colleges.

It is undeniable that higher education must become cheaper and more effective. The best way to attract funds to support public investment in colleges is to demonstrate that colleges make good use of the money they raise. Then higher education will have to bite

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