Student Debt and the Value of a Degree
April 29, 2012 | By Jennifer Hemmingsen | The Gazette | Link to article
It's no surprise that President Barack Obama's college affordability message got such an enthusiastic response Wednesday in Iowa City.
Student debt is one of only a few pocketbook issues for the young voters who made up the bulk of the president's audience at the University of Iowa Field House.
But Obama wasn't pandering: The cost of college is something to care about even if you're closer to your 20th reunion than to commencement.
College tuitions and fees have tripled in the past 30 years, even when you adjust for inflation. Student debt is at a record high. Some experts think we're staring down the barrel of a student debt crisis that will make 2008's housing collapse look like a stumble in comparison.
On the other hand, college is clearly worth some investment: Workers with advanced degrees are more likely to find a job, and make - on average - significantly more than their peers with a high school diploma.
The Pew Research Center crunched Census Bureau data to find that the average adult with a four-year degree will earn $1.42 million over a 40-year career, compared with $770,000 for a typical high school grad. That's no chump change.
And the collective benefits of a well-educated workforce are huge - directly affecting state income, sales and property tax collections. Allowing college graduation rates to stagnate makes it harder to recruit and sustain businesses dependent on highly skilled workers.
According to a study released this week by the Center for Law and Social Policy, the United States is falling far behind other countries in numbers of workers with postsecondary credentials.
The group estimates that in order to remain globally competitive, states must ensure that at least 60 percent of working-aged adults have an associate or bachelor's degree by 2025. In Iowa, today, we stand at about 40 percent.
In short, we're all going to suffer if we don't figure out this college affordability puzzle, and quick.
Keeping loan interest rates down will help, but it's not the whole answer. As Obama mentioned Wednesday, 40 states cut higher education spending last year.
Here in Iowa, state funding covered less than 40 percent of regent universities' general education budgets in fiscal 2011. It accounted for
77 percent of those budgets 30 years before.
If we want to keep from paying the hefty collective costs of pricing more students out of higher degrees - and higher standards of living - state legislators are going to have to pony up.