Higher education now more necessary than ever
Labor Day has passed and college classes are about to begin. But a change is occurring that most people are unlikely to notice. The number of American students in colleges and universities has been declining annually since 2011. According to the U.S. Census Bureau, student enrollment reached a low of 19.1 million in 2015. That amounts to 1.2 million fewer students than in 2011. There is a broad consensus that the reason for the decline is the growing cost of a college education.
The cost of education is now so expensive that some have concluded that it makes economic sense to get a job right after high school. The problem with that conclusion is that by 2020, it is projected that 65 percent of available jobs will require postsecondary education.
That was not always the case. According to the report “Recovery: Job Growth and Education Requirements Through 2020,” back in 1973, just 44 years ago, high school grads qualified for 72 percent of available jobs. That percentage is predicted to be only 36 percent by 2020, only half the amount.
The problem is that the cost of a college education has become unaffordable. According to the U.S. Department of Education, tuition alone at four-year public colleges increased an average of 7.2 percent in 2016. Students have been forced to assume burdensome debt loads in order to get college degrees.
Student loans have now become the greatest consumer loan category, with the exception of mortgage debt. U.S. students owe $1.3 trillion. In last year’s graduating class, the average student began his or her career while saddled with a debt of $33,172. The monthly debt service on those loans greatly reduced the graduate’s available funds. This creates the illusion that the college alum is working for little more than a high school grad.
Colleges with insubstantial endowments are forced to depend excessively on revenue generated by student tuitions. Well-endowed colleges also have the financial capacity to construct attractive college facilities and inaugurate expensive programs. The inability to do this will induce prospective students to apply to other more appealing colleges. As a result, tuition revenue will decline in the less appealing school.
This is a catch-22. Diminished tuition revenue will force the college to cut administrative costs. In some circumstances that could make the imperiled college even less attractive to high school seniors looking for the next step in their education.
With the American economy becoming ever more technologically oriented, it is critical to find a low cost method of postsecondary education for talented students. So far U.S. educators have not yet discovered the solution. But it is clear that the goal is to provide every citizen with a quality education from the cradle to high school graduation, and then a low cost or even free college education for the talented and highly motivated.
In the international challenge to develop talent, it has become critical for the U.S. to encourage our youth rather than to impose on them a financially destructive system.