From small technical schools to big state universities, plans are underway for graduation. Excited graduates will celebrate with their friends. Proud parents will take dozens of photos. Distinguished speakers will give advice about embarking into the world.
But many families will also be talking about one of the hardest things about leaving school: paying back student loans. As I travel all around the Commonwealth, the single most frequent concern I hear is how to pay for an education. I talk with moms and dads who are committed to help their kids get an education, but they see costs spiraling out of control. I hear from students who did everything right – worked hard, played by the rules, and are on their way to graduation – and who have been left drowning in debt with few job prospects in sight. I listen to young people who have dropped out of school, crushed by the growing debt burden. I talk with people in their 50s who are balancing mortgages and the costs of raising a family, while still trying to pay off student loans. For hundreds of thousands of people, managing student loans is a major source of stress and anxiety.
If Congress doesn’t act, it is about to get harder. On July 1, interest rates on subsidized Stafford loans will double, going from 3.4% to 6.8%. Estimates are that this increase will cost the average student borrower more than $1,000 over the life of the loan.
The rising price tag for an education is swamping more and more families. After adjusting for inflation, a student paying for tuition and fees at a public university today will pay more than 350% of what her parents paid 30 years ago. The costs of private schools are even higher. Fewer and fewer families can manage those costs without turning to debt. It is no surprise that the combined national student debt is now more than $1 trillion.
Big student loans were not always a way of life. I grew up in an America that was committed to expanding opportunity through education. The generation before me had the GI Bill, which drew thousands into colleges, universities, and advanced technical training. In the 1950s, when America found itself lagging behind the Soviets in space exploration, we passed the National Defense Education Act (NDEA) to help more kids go to college.
Education pays off. There are no guarantees, but for students who work hard, education and training often mean a lifetime of higher earnings. A better educated workforce pays off for the rest of us too. The GI Bill helped thousands of graduates lead our country to a half-century economic boom that lifted all boats – and that was the envy of the world. Today, the most innovative businesses seek out well-trained workers who can partner with them to build a stronger future.
Investments in education cost money, and where we spend our money reflects our deepest priorities as a country. In the past few weeks, Congress voted to protect subsidies for oil companies and special tax breaks for billionaires. That money could have been invested in our public colleges and universities, in advanced technical training programs, or in stronger grant programs. It is time for Washington’s priorities to line up with the students and their families who are working hard to build a real future.
A generation of young people already faces a mountain of student debt. Congress must act quickly to ensure that student loan interest rates stay at a reasonable level. Over time, we need to make consistent, thoughtful, and well-planned investments in education. Our children, our families, and our future depend on it.
You can’t just educate people if there’s no jobs. Jobs draw people towards the value, whether its in training or college education. That’s how they determine what to major in etc, how they figure out what will pay off the loans.
And if you’re attacking business, then you’re just making it harder for people to get the jobs to pay the loans. It would really help if you expressed some understanding of this.
The college loan program is getting a tougher look because kids just went to college and got generalized degrees and expected to get hired just because they had a college degree. The colleges took all that money and turned themselves into lifestyle centers. How can we justify throwing more money at these people when they haven’t reformed? Colleges have successfully lobbied to block any evaluation of their performance when it comes to the results for their graduates. It’s time they were put under the microscope.
And go to work for $1 a day competing with the developing world to make shoes and t-shirts.
Education is the second-largest source of jobs in the Commonwealth. Whatever helps education helps us.
I went to two colleges myself, Bob, so I should know when we have passed the point of diminishing returns on education.
On the cynical side, the Republicans don’t like sending money to college because it pays off an opposition constituency. The Dems like it for the same reason.
Even on the highminded side, you won’t get returns, even as an artist or poet, if your college is disconnected from the culture of giving some people what they want, returning some kind of pleasure principle. The way to find that out is get out in the world, or as Republicans say, let the market decide. Are they really so different?
The market will lead people to get trained in what they need a lot faster than 4-year college does. An expanding economy will hoover up the people to the right places.
Harvard Crimson (which appears to be the paper of record today in the reality-based community):
Republicans, at least the ones who run the GOP and benefit from it, love college, and educational institutions in general: George W. Bush is a case in point, Yale and Harvard to double-down. Mitt Romney has two Harvard degrees. That is because they know what they are doing, unlike most of the people who vote for the GOP.
Maybe three would have been the charm!
of mine get accepted to Johns Hopkins for engineering. He’s going to Penn State because its cheaper. He can’t afford the $100,000 of debt he’ll be in when he graduates.
No, you go to Harvard to rub shoulders with the other ultra-rich. Great investment yes, great system, not so much.
Read it again. Warren is not attacking business. And what you call “generalized degrees” (I assume you mean Humanities) teach people to think. You wouldn’t know about that, or maybe you do and just belong to the 1%.
I went to college on the GI Bill. Changed majors three times before I figured out what I wanted. Got first a B.A. in economics, then a Ph.D. in history. I wasn’t thinking about getting rich, only about doing something I liked doing that also would help somebody else. Had I been required to pay college costs like the present ones I reckon I’d still be picking cotton.
Go read Krugman or Stiglitz. You need to learn about real life.
A general degree from a community college or a for-profit college has dubious value.
So Mr Neer you must be in favor of those predatory for profit colleges that soak all the benefits from veterans because whatever helps education helps us.
You must think that kids who would be much better off learning a skill shouldn’t do that rather than going to a CC because whatever helps education helps us.
By your logic we should encourage our private elite colleges (and maybe all of our local private colleges) to stop enrolling Americans and instead admit exclusively foreign rich kids. They could then raise tuition dramatically, but then increase salaries and other spending boosting the local economy because whatever helps education helps us.
We no longer have a realistic view of education. Up until 1974 in MA you could become a CPA with a two year degree. Now you need a Masters. We have created an educational monster where countless young people are spending tens of thousands of dollars and learn very little and get no where.
Many people including myself made something as the result of advanced degrees. That’s not for everybody and college isnt’ for everybody. We need to take the clues of countries like Germany that do it differently, rather than just buying into the song and dance of the US educational-complex
Amazing brazenness, Professor. I can’t believe you want us to just accept as fact that college is 350% more expensive than it was 30 years ago. Why is so expensive, Professor? Any ideas? Is there any way colleges could reduce their tuition, get it back to where it was 30 years ago? I don’t see why it shouldn’t be cheaper than it was 30 years ago, back when computers cost $10,000. I bet schools could trim tons of positions, cut salaries across the board,and cut research programs by at least half. Heck, we could slash research budgets down to 1/32, even 1/64 of what they are, and we’d be fine. Better off, even, considering how much energy those programs use.
but I did want to say “great job” to merrimackguy. I think I started to say “yes, by her logic, we should just keep increasing college tuition ten times over and give Professor Warren another $100,000 raise, because whatever helps education helps us.”
talking about here isn’t caused by education, it’s caused by the professions themselves. You now need a PhD to fill prescriptions. You need a PhD to be a physical therapist. You need Master’s degrees for speech pathology and occupational therapy.
What we have is degree inflation. We are narrowing supply by requiring degrees for jobs that used to be and can be done by people with lesser credentials. This is due to the professionalization of jobs, not education.
In a better world–one a GOP-led country would never be–our society would more diverse avenues leading to the work place. Some European countries are better in this regard: students don’t have to go to college to go into business, for example. To my mind, why should they? However, they can go to a business school, and guess who pays for that? That’s right. The government.
The push for college is that it is the only route we have these days to a middle-class life. I’m all for college and education for its own sake, but I don’t believe everyone should have to follow that path. But aside from Seascraper’s invisible hand fantasies, what choice do they have? Take the risk of not having a college degree?
Elizabeth Warren is right on with this issue. Kids are getting priced out of college because it costs a freakin’ arm and a leg. When my wife graduated from Mount Holyoke in 1987, it cost her $13,500 for a year. Now it’s almost 4 times that much. There’s huge inflation in college costs and Massachusetts, thanks to you tax cutting types, has been slowly divesting itself from its responsibility to educate our students.
.
n/t
He might be my favorite Tom Tomorrow creation.
…it’s worked so well in the past to control costs.
The reality is an explosion in the cost of higher education; While simultaneously, technology reduced the cost of accessing and acquiring knowledge to historic lows. The educational industrial complex knows no bounds in it’s avarice greed for capturing an every increasing proportion the GDP and lust of power.
What’s next? A plan to protect educational incumbents with ever more pointless and onerous accreditation standards? How about ever increasing professional credentialing requirements? Be creative, I’m sure you’ll find some way to simulate demand for that absurdly overpriced product.
Read more:
http://www.time.com/time/magazine/article/0,9171,2113794-1,00.html
even if it comes from one of American journalism’s bigger douchebags. He was Atrios’s third runner up for Wanker of the Decade for pundits. But don’t take it on authority, here’s the bullshit he slides into a reasonable-sounding editorial:
Um, what “education establishment”? Oh yeah, the one made up by clown from ground zero in the battle for concern for others aka Arizona.
Who’s pushing kids toward college? I’m about establishment as they get when it comes to education, and we aren’t pushing kids toward college in school. Their parents are. Kids are. The future for kids not going to college is bleak.
Even the education policy establishment is largely driven by business interests and business-funded interests like the Boston Foundation. And don’t forget the Pioneer Institute which opposed the new Common Core curriculum because it put less emphasis on non-college-oriented learning? As I pointed out somewhere on here, what choice do kids have? Without a high school degree they are screwed.
The GOP fights education because a literate and educated electorate is inimical to the political and economic interests of the 1% that has bought and paid for today’s GOP (and its Tea Party enforcer/evil twin). The 1%/99% class warfare is real, and keeping the 99% uneducated helps the 1% keep them down.
I apologize for being strident, but I sometimes get the sense that our side of this class war really doesn’t get how deadly serious the GOP is.
They do want to protect their wealth. They DO want to reverse decades of progress in women’s reproductive freedom (because effective and affordable contraceptives enable women to be educated, financially independent, and therefore powerful). The DO want to make it hard for working class kids — especially minorities — to attain economic parity. Today’s GOP fears minorities — just look at their voter ID strategy.
We have to do more than just name these assaults (though we MUST start there). We have to act as if we understand that the GOP truly is trying to break our collective political back — because that is precisely what they are doing.
The comments from Ms. Warren are welcome and spot-on.
The strategy articulated by Mr. Fehrnstrom for Scott Brown becomes more clear every day: wage political war on women, minorities, the gay and lesbian community, and now higher education itself.
This exemplifies the classic “divide and conquer” way that the elite one percent has maintained its grip over the ninety-nine percent for a good part of human history — fire up the passions of ignorance, blood-lust, and religious fervor in hopes of diverting the real and deserved unrest of the plundered and pillaged way from the actual perpetrators (like Scott Brown) and towards each other.
I’m glad to see our “cadre [of] conservative BMGers” sharing their anti-intellectual bias with all of us.
The GOP in general and Scott Brown campaign in particular has been pandering to the mouth-breathing arm-dragging anti-intellectual crowd all along. Here, we see the strange fruit of that seed: a candidate for high office emphasizes the importance of making higher education affordable for all of us, and the response is three different Brown supporters attacking higher education. With supporters like these, Scott Brown needs no enemies.
Thank you, Ms. Warren, for again sharing with us your inspiring call for a return to the values that made our nation and culture great.
.
Oh yes, the same “Republican economics blew up the economy and destroyed millions of jobs in 2008” part.
Really, sea scraper, you are the Colmes to our Hannity, but in reverse. Good to have you.
That will win a lot of votes in Massachusetts. Not.
Screw the market and let guv’mnt set the price of tuition.
Well said, comrade!
Why are undergraduate loans the only thing on the table? Why not graduate loans? I graduated from graduate school in 2010 with a sizeable, but not back-breaking amount of federal loans (I fortunately did not have to take private loans). The rate is 6.8%. I think for some graduate loans it has been 7.3% in recent years. Those rates are out of control relative to what the rates are for everything else. For graduates who couldn’t find jobs and took out $150K or more, the burden is crushing. And, of course, they are not dischargeable without very serious circumstances, which is just insane.
Many with graduate degrees are now seeking food stamps.
http://www.huffingtonpost.com/2012/05/07/food-stamps-phd-recipients-2007-2010_n_1495353.html?ref=fb&ir=Education&ncid=edlinkusaolp00000008&src=sp&comm_ref=false
Doctors and nurses. Unforunately, there is no shortage of investment bankers, who are drafted from liberal arts programs at the Ivies.
Just lower the student loan interest rate, don’t use it to change the issue so you can do nothing about it.
Then we can talk about the tuition bubble.
Making loans cheaper is only going to help a little. The problem is the cost of college is out of control. College costs remind me of the housing market of 2005. We need to make college cheaper – not make loans more accessible – at least with a mortgage you can discharge it in bankruptcy – you can’t with college loans.
“College tuition soar each year, advancing far in excess of the inflation rate. The overall inflation rate since 1986 increased 115.06%, which is why we pay more than double for everything we buy. On the other hand, during the same time, tuition increased a whopping 498.31%. ”
http://inflationdata.com/inflation/inflation_articles/Education_Inflation.asp
The market is speaking.
It’s full of people that just do what they think they should do, or what Obama tells them to do if they want “dignity,” and all their peers and parents tell them its the right thing to do. It’s not really a free market, where people have full information and understand what the true costs and benefits are, it’s a coerced manipulated scam market.
… something related to this actually:
father is Robert Barro, Josh writes for Forbes and National Review, raising doubts about his credibility. What confirms those doubts is the idea that “productivity growth is flat, there’s little evident adoption of technologies that could make the sector cheaper, etc.”
Productivity is a questionable measure when it comes to education.
… Barro’s background. Your point about productivity is well taken. I do think that the market logic of education probably has particular characteristics that distort the way incentives are supposed to work in a well designed market, particularly with regard to what Ezra points out in that education is particularly time sensitive with a small window of opportunity and the point about the reasonablility of doing without. There is evidence to suggest that the subsidy of education through banks (in the mechanism of loans) can create some price distortion, but I suspect these other characteristics do more on that front.
I guess what I’m interested in are the mechanisms that affect (distort?) price. Lopsided incentives are certainly one – but I’ll admit that loan subsidy is probably another (although it should also be noted that the particular incentives that the system gives to banks with regard to these loans contribute to some ‘bad actor’ behavior on their part – meaning that while you should certainly complain about price, the lending can be predatory as well).
to figure out the causes of the inflation.There has to be some research on it. There are issues.
For example, only subsidizing public colleges would be much more cost effective. We would subsidize more students for the same money or less. Why should we subsidize a kid to go to a private college to become a teacher? This a complicated question, and not one likely to be addressed in my lifetime. I’m not against private colleges per se, but I have students who attend private colleges that aren’t as academically good as UMass-Amherst, though they offer a different experience. This is another cost advantage of post-secondary European education.
I’m a public college guy from Holyoke Community to UMass. I found one of my old HCC bills for a semester in 1982, it was about $325 for a semester. I think its over $4000 now, if you have your own insurance, more if you don’t. HCC doesn’t have the personnel or infrastructure costs of UMass. There are a lot of adjunct faculty who get around $3000 a course. (If they taught a full course load, they could make $15,000 a year at this rate). They don’t have dorms. Part of this inflation is due to declining state support for public colleges.
Does anyone commenting here have an example of an existing college that is a lean mean degree producing machine that passes the savings onto the students? I took a quick glance at two explicitly conservative colleges that I am aware of and the tuition didn’t seem that much different than every other place.
Ave Maria University
http://www.avemaria.edu/AdmissionsAid/UndergraduateStudents/TuitionFees.aspx
The King’s College
http://www.tkc.edu/finaid/tuitionfees.asp
It might be one of those markets where when the price goes up, demand goes up, and the lean mean strategy results in less demand. They need a star professor, notoriously overpaid. It’s like an expensive restaurant, where the extravagant cost of the dinner is what impresses people about it, wow, you went there? Also, since people generally take out loans to go to expensive colleges, and believe that the better degree will result in a higher paycheck, they don’t feel any reason to keep cost down. I guess that is true of conservative schools too.
http://www.olin.edu/admission/costs.aspx
not a conservative college a great engineering college.
or Brigham Young University at 12K a year
http://yfacts.byu.edu/viewarticle.aspx?id=86
The big question is what does college cost per year – not what do you pay. Umass amherst is 20K a year but it cost 30-40K a year.
I remember when I first came to Boston and people were like “oh, you went to one of those midwestern schools.
No way anyone from Rutgers Law gets a job in Boston today. I know people that went to BC Law and they were way at the back of the line behind Harvard and Yale.
I also, if I can get personal for a minute, want to know Mr Neer, if you think every needs four advanced degrees like you? Your student loans must be incredible!
Can EW really do no wrong? Is there any question in your mind about why she is the only (I’m working on the research, it takes time) professor at Harvard Law not from a top 10 law school? Maybe she is fantastic, but this whole thing does not look good politically. If Rep. Capuano was in this race you bet his supporters would be all over this with nary a peep from the Brown camapign.
Okay now that I’m done being snarky. I can’t believe how this thread has gone. At no time did I blame Democrats for anything, in fact I think we got into this mess as a country, and it was maybe assisted by the government, but greater societal forces were certainly at work. I like the knee jerk “blame the Republicans” though.
I guess the question is how do we get out of this (the high cost of education)? I don’t think Gov Patrick’s let’s centralize the CC’s was the right approach. Sorry I’m not quoting sources (because I assumed that most of the people here listen to NPR, watch PBS, read Atlantic, etc) but one of our big problems is that we as an economy are always focused on productivity (more so than Europe, for example) and we are constantly eliminating jobs. Our education system is turning out people for whom there are no jobs, and some of those are entering the workforce deeply in debt. No one (in my mind) seems to be focusing on what I perceive to be the larger issue. Whether the loans at 3.5 or 7% doesn’t change anything.
Personally, I think people in general benefit from education. It is not universal, but as a rule the more education people have the higher salaries they earn. Moreover, the countries we are increasingly being forced to compete with — and the ones our children will have to compete with — are investing hand over fist in education. China, for example, has no doubt whatsoever about the value of education. Wikipedia: “Chinese spending has grown by 20% per year since 1999, now reaching over $100bn, and as many as 1.5 million science and engineering students graduated from Chinese universities in 2006. China published 184,080 papers as of 2008.” In the face of this, Scott Brown wants to reduce investment in education — loans that citizens themselves are taking out, let’s not forget … borrowers have the most skin in the game, this is no giveaway. It’s like unilateral national disarmament.
and maybe tuition wouldn’t be so high if teachers weren’t paid $350,000… for teaching one law class. Could that really be true? Did EW really make $350K for teaching a single class? If so, I find it hard to believe she has a credibility problem discussing student debt. If it’s false, how much did she make and what did she teach?
and not the market dictate tuition? What exactly are you saying.
Accreditation bodies are controlled by the institutions themselves. They have a vested interests in: limiting competition, ever expanding administrative overhead, and separating students from as many dollars as possible to the benefit of those institutions.
In case you haven’t noticed educational accreditation is working overtime on limiting the disruptive impact of online education to their financial bottom line. Rather than embrace delivery of better value to students, they are actively working to maintain a status quo of wildly inflated overhead, high costs, and poor value.
To improve their accreditation. Of course I’ve found a lot of my best professors didn’t have PhDs…..
What’s the difference from one institution from another, accreditation bodies? That’s like saying certain electricians cost is high because they need to maintain their license?
Overreach.
… accreditation and licensing can be employed to produce rent-seeking regimes. This isn’t true in every case and you’d have to get into the details to make the case in education, but the idea isn’t absurd.
See this or this for instance.
Higher education is the most successful rent seeking guild known to man (even the ABA doesn’t hold a candle to these thieves). They arbitrarily limit and control their own membership through accreditation bodies, and act almost entirely in the institutions best interests to the financial detriment of their students.
… could be believable (it’s certainly plausible), but I’d like to see backup before I condemn accreditation to be a 7th circle of hell.
Electricians quickly learn a respect for electricity and how it works and therefore why certain things are important, and understand what happens if you cut corners or misrepresent something for what it is not. The legal law and the physical laws are quite congruent. Academics think that if you make a law that cars have to stop for pedestrians in crosswalks, that should be enough. They don’t respect physical law, to say nothing of moral law, they think it all should be superseded and tamed by postmodernist moral relativism.
The point was, that’s why electrician licensing isn’t as big a problem, in terms of it leading to bloating and self-interest. The people that set the standards are very smart, reasonable and responsible people. They aren’t potheads.
The number of hours required to get a license has gotten much higher. I don’t think electricians have gotten any better – there are just less of them.
Same thing happened with CPA’s – you now require a graduate degree.
Or PT – you now are required to have a PhD.
The extra degrees don’t make you a better – they just restrict who can enter the market.
accreditation bodies? Maybe you know more than I do, but what you’re saying doesn’t match my experience with NCATE–the accreditation organization for teacher education–was not like that or NEASC, this high school accreditation body.
The alternative to these organizations is what? Government regulation? We know how you guys feel about that.
Harvard, Yale, Columbia, University of Chicago law schools
Undergraduate Princeton, Yale, Harvard, Stanford, Brown
Some add to the above Oxford, as well as mutliple graduate degrees, all from prestigious universities.
Very impressive educational credentials. I don’t think I saw one public institution.
Oh yea, and then there’s one that graduated from University of Houston (I’ve never even heard of that) and Rutgers Law school.
http://www.law.harvard.edu/faculty/directory/professors.html
They will never ever pass us in higher education. However the reasons don’t involve Republican bashing, so unlikely you would be able to grasp them.
whatever anyone thinks of the cost of college, there is no reason for the abusive way education loans are structured. Bankruptcy should be available on these loans, and the riduculous late fees and restrictions on refinancing should be removed. Private equity firms and real estate developers can walk away from their mistakes through bankrupcy, but 18 year olds are indentured for life if they borrow for their education.
whether an interest rate is reasonable or not? I’m not any kind of expert on the answer, just asking.
If it’s less than cable, or a entry-level car lease, that’s reasonable. If it starts cutting into the weed money, that’s unreasonable.
“Estimates are that this increase will cost the average student borrower more than $1,000 over the life of the loan.”
A little research showed the average student loan in 2008 was $ 23186 with a ten year term. The additional interest is far more than $1000; by my calculations the difference is around $ 4600. …She did say “more than $1000” so technically she’s still correct but not making her best case maybe.
My uniformed opinion tells me that the relationship between tuition and the operating budget of a university is varied at best. Many small schools operate on shoestring budgets and depend heavily on tuition to keep the doors open. Other, more well endowed universities like the great university in cambridge (and MIT too ;))have huge endowments and tuition costs are a matter of prestige.
Harvard has a $3B annual operating budget – no way is that paid by tuition. Before the 08 crash, they were seriously considering doing away with tuition in favor of a more transparent merit basis.
Then there is the cost on paper v. the actual costs. Some schools have many scholarships so that the tuition appears inflated.
My point is tuition seems to be very arbitrary.
…looked at in isolation. If what you’re really wondering about is the relationship between the costs born by students and operating budget, then you need to consider all costs – which means not just tuition, but fees, housing, etc.