Business Insider posted an article in 2014 discussing the biggest problems on college campuses. The main infographic displays the 21 biggest problems for college students ranked from most to least problematic based on survey responses. The results showed that 63 percent of those surveyed viewed the cost of education as the biggest problem facing college students today. Additionally, 66 percent of the surveyed 1,200 full-time, four-year college students agreed that the “cost of college is too expensive.”
The truth is that per capita income has been stuck at around $30,000 for the past 16 years, according to data from the United States Census Bureau, while the cost of tuition and fees at a four-year public university have nearly doubled in that same timeframe, according to The College Board. This means people in general are not earning more money each year, but the cost of college continues to rise very quickly.
The end result is more and more people rely heavily on loans to help pay for college education. Thus, we can explain the growing student debt crisis — not to mention that students’ inability to pay off college loans has roughly doubled from 2005 to 2015. Another interesting note is that huge investments in making higher education more accessible have not increased per capita income compared to increasing cost of living and cost of higher education.
This does not bode well for Bernie Sanders’ plan to “invest” so heavily in higher education by making public college free because investing in something usually means that we would get some kind of return. Historically, this has not been the case.
In 2014, student loan debt broke $1 trillion with roughly 11 percent being over 90-days-delinquent or in default, according to a presentation compiled by Free Domain Radio. This is a huge problem not just because of the soul-crushing debt owed by students but also because of the fact that this money has effectively been 100 percent removed from the economy. That means as of 2014 over $1 trillion were unavailable for borrowing, investing in capital, creating jobs, etc. because it was frozen in the form of student debt.
All that aside, the obvious question would be: Why is college tuition increasing so drastically? A 2015 study from the Federal Reserve Bank of New York analyzed the relationship between the eligibility of federal aid for students and the cost of tuition after policy changes raised education subsidies. The report found that tuition fees increased proportionally with the number of students who were eligible to receive aid around the time of policy changes.
Unsurprisingly, this shows that increased demand for a relatively steady supply causes an increase in price. Instead of making college “affordable” as we’ve heard so many politicians claim when talking about subsidizing college education, subsidies actually increase the price load on every student without any noticeable impact on per capita income over time. Recall that over $1 trillion is tied up in student loan debt instead of being invested to create jobs and other opportunities. Education subsidies over the last 50 years have made the country’s economic standing worse, not better.
The large number of people attending college as a result of the eligibility to borrow money at low interest rates from the federal government has also caused another crisis: the devaluation of a college degree. It’s bad enough that after spending 13 years in school to achieve a high school diploma, workers generally aren’t viewed as productive enough to warrant a living wage (which speaks to the current state of our primary education system).
Because of this, high school diplomas are only valuable as a means of getting into college whereas they used to be enough to land a decent job. College degrees are slowly but surely becoming as useless as high school diplomas due to the declining value of high school diplomas and massive government subsidies artificially increasing college attendance rates.
Since subsidizing the cost of attending college is mostly to blame for the student debt crisis, I would first suggest ending these types of federal programs. The next step would be to make a high school diploma worth something again, but this would require a serious rework of our primary education system. In general, just remember: more government money, more problems.