A college degree’s price tag, Bloomberg BusinessWeek reported has increased 1120% since the Labor Department began keeping such records in 1978. Learning that medical expenses have risen 601% and food 244% over the same period, eyebrows raise and thinning wallets hide for cover.
Since the 2001-2002 academic year, College Board figures show a tuition and fees rise of 5.4% annually above inflation. Between 2001 and 2011, the real net average tuition (price less grant values) at state universities increased 33.1%; at private academies, 21.2%.
While the shutting down of the government and the debt limit have momentarily (hopefully) commandeered the headlines, these skyrocketing tuition costs and the interest on student loans are very much on the mind of worried parents and financially stressed students and graduates. And why not? With the national student debt nearly reaching $1,000,000,000,000 (Yes, that’s one trillion dollars!), some mull over whether college is still worth it.
Professor Daniel Lin, Lecturer in Economics at American University explains the rise in educational costs by the Economic Law of Supply and Demand; when demand increases, expenses rise and the opposite follows inversely. But that is not always happening and some argue that the Law of Supply and Demand fails to explain rising tuition costs; for example, law school enrollments are falling significantly but law school tuition costs keep climbing.
Tom Harkin, the United States Senator from Iowa (Democrat) who Chairs the Senate Health, Education, Labor and Pensions Committee, has expressed his concern this way: “For millions of young people, rising college costs are putting the American Dream on hold, or out of reach.” Mike Enzi, the Republican Senator from Wyoming on the same committee has implied a parallel concern when he stated at a Jul. 19th Congressional hearing that Pell Grants and student loan programs do not address the systemic problems of rising educational costs.
And mentioning grants and loans, some have ascribed rising tuition costs to them. But there are significant facts that imply otherwise. According to College Board records, before 2007, tuition changes did not appear related to public funding. But since 2008, the advent of the recession, total public funding for higher education has declined by 14.6%. Yet, since then, tuition expenses have risen progressively, dramatically. Economists at the Federal Reserve Bank have found these facts troubling and believe the expense of a college education will become an increasing burden shouldered by the students.
There are several dilemmas facing college age youth these days: tentative accessibility to education due to expense, difficulty obtaining jobs following the completion of college or graduate school in an America with painfully slow job growth and the drain, emotionally and financially of student loan debt with accumulating interest during times of job searches without success. Just because one is not working does not mean the interest rate meter is not running.
When it comes to tuition, there are other questions too that go beyond the dollar total; there is a question of fees. Sometimes undisclosed, tuition often includes add-ons like athletic fees. While nothing like the freewheeling, stadium funding and tax-exempted controversies that exist in the NFL, there are still expenses that some believe benefit the college or university that have little or nothing to do with students and their pocketbook-parents directly yet they pay the freight.
The Student Loan Certainty Act of 2013, President Obama signed into law on Aug. 9th did serve to take an edge off of these concerns to degree, but only to degree. While caps on student loan rates are part of the Act, the rates are linked to Treasury notes the value of which will rise as the economy improves and the caps are much higher than they were on the old loan rates. At the signing, the President said there is still much that needs be done if these issues are to be resolved. But little was said as to what needed to be done.
Some have argued, sometimes persuasively that there is an effort underway by a very financially influential few among the popularly termed, “1%” to “rewrite” (or should the term be, “rewire”?) the American experiment as an oligarchy via the strategic funding of significant individuals and organizations. The John Roberts’ Supreme Court’s Citizens United decision arguably enhanced that possibility dynamically. The Court’s decision to hear oral arguments in McCutcheon vs. The Federal Election Commission on October 8th may lend even greater facility to the political designs of some, depending on whether the Court accepts the case and, if so, how it decides.
When one looks at the dilemma in education and its accessibility for the “average” college age student, the position debatably grows from faint plausibility to, perhaps, some degree of genuine possibility. After all, an educated public is less vulnerable to manipulation and less inclined to submissiveness so the purposively influential few may well prefer to educate their own, not the majority in order to further their ambitions for themselves and the nation more fully as they most wish it to be.
Written By: Edward “Ned” Haggard