I’ve been saying this for years. I get it that teachers and professor should be paid well, I get it that colleges need to turn a profit to be lucrative, and I get it that authors need to get paid for writing text books. But it has all really gotten out of hand (come-on, $200 for a text book you will use for three months; then can’t sell to the used book store because the author has released a new revision).
In relation, the other thing that really irritates me is employer’s misconception of what a degree costs. Being in the IT field I can’t even remember how many interviews I’ve been on where the employer listed a bachelor’s degree as a requirement, and then during the interview informed me that the starting salary was $30,000 (or there-about). And don’t get me started on the ones that want you to have a degree, certificates, and experience, but want to pay less than $40,000.
I have witnessed second-hand an even worse under appreciation for degree value. My wife has a master’s degree; this really excites some employers during the interview process – they like the idea of that highly educated employee on their team. Then the lowball salary offer comes in; when questioned about it the typical response is that “the master’s degree was not a requirement of the job.”
Well apparently someone else noticed that college costs too much; a report released by the National Center for Public Policy and Higher Education (PDF) indicates that on average the cost of college has risen 439% since 1982. What!? Inflation has only risen 95% since 1982.
Previously the maximum an undergraduate student could borrow in federal funding was $23,000; that’s not enough to cover a bachelor’s degree at most state schools. If you wanted to go to an out-of-state school or to a private school on federal funding alone you could forget it. Last year President Bush signed the College Cost Reduction and Access Act of 2007 changing that. One of the many things that the CCRAA did was to raise the maximum that a student could borrow from $23,000 to $30,500. That is still only enough money for some state schools, which means you will need some other funding or will need to get a private student loan.
Another side effect of the CCRAA was that other lenders were no longer authorized to issue federally funded loans. The idea with this being that Direct Loans (aka: U.S. Department of Education Direct Loan Program) would be the only organization issuing federally funded loans, so costs would be kept down. A great idea in theory, but what it really did was eliminate all their competition.
Ever notice how a grocery store with horrible service will lose out to the grocery store with good service; and eventually force change or closer? Ever notice how service at most Post Offices is horrible, but we have no alternative? Direct Loans has some of the worst customer service I’ve ever experienced, and I have no alternate to choose from. Coincidence?
Currently about 8% of students seek private loans because federal funding isn’t enough. Last year in the US about $60 billion was issued in federal loans, and about $17 billion in private. A few months ago CNN covered a report by FinAid.org that showed 33 lenders have suspended their private student loan program since August 2007. Included in these are a few big-dogs, Wachovia, Bank of America, College Loan Corporation, and Campus Door. The current economic down turns have not helped; Sallie Mae is the county’s leading private student loan provider, and one of a very companies still offering private student loans.
Even President-elect Barack Obama has given the nod acknowledgment that this is a problem. On his campaign site (and still there after winning), under the Education section Obama states he “will create a new American Opportunity Tax Credit worth $4,000 in exchange for community service.” This would not only be a great boost for those struggling with tuition, but as noted on his page could almost make community college tuition completely free. The plan goes on to state that recipients would be required to conduct 100 hours of community service. It does not indicate if this will be a one-time credit or a renewable credit, but with the statement that it could “cover two-thirds the cost of tuition at the average public college or university” – it implies you could receive the credit more than once. He also wants to simplify the financial add application process, stating that it should simply be a check box on your taxes, instead of the six-page form.
Another statistic from the NCPPHE report that CNN sites: 40% of Americans age 35 to 65 hold an associate degree or higher, ranking 2nd in that statistic; Canada ranks 1st with 44%. For those under age 35 Canada ranks 1st again at 55%; but the US ranks 10th down at 39%. I thought we were supposed to be getting more educated.
Even if you do manage to get enough funding, and manage to keep your head above water to make it through school, and miraculously land a job in your chosen field (or close enough); will you be able to afford the payments? Can you afford two mortgage payments? Somehow we manage it; between my wife and me our monthly student loan payments come equal to our mortgage payment.
The cost of college in the US is getting out of control; it’s making it difficult for young Americans to afford higher education. Schools themselves cost too much, the economy makes borrowing enough funds difficult, and employers are unwilling to pay for the cost of the degree they demand. But who should change? Can schools actually lower their tuition costs? Should the government lend more money? I’m sure we can agree that many employers should be paying their employees what they are worth. Can Obama bring the change he has promised; and will it be enough to break out of this problem?