Today the College Board announced that the cost of attending college continues to outpace inflation, with troubling implications for the upward mobility of our youth. According to the report, over the past year, the cost of tuition and fees at four-year public universities rose 6.5%. This spiraling cost of higher education, combined with dwindling federal financial aid in the form of Pell Grants, is forcing an increasing number of students to turn private banks to obtain loans to finance their education. According to the LA Times, bank loans, almost non-existent a decade ago, now account for 20% of student borrowing.
That’s bad news for America’s youth, two thirds of whom use some form of financial assistance for college– in 2004 50% of graduates borrowed an astonishing $19,000 to pay for their education.
This news also spells trouble more broadly for the future economic opportunity and upward mobility of our youth, who are likely to struggle with the costs of obtaining a higher education at a time when returns to postsecondary schooling are growing. It is widely acknowledged that college makes a difference in everything from higher wages to the ability of the U.S. to remain competitive in our increasingly dynamic global economy. Workers with college degrees have skills that make them more flexible and adaptable to change. College-educated workers now earn an average of 45 percent more than high school graduates, and the Department of Education reports that nearly 90 percent of America’s fastest-growing jobs will require some postsecondary education or training.
How can we assure that every student who wants to attend college has access to an affordable education, and will not be burdened with deep debt that prevents them from saving from the things that matter most for their future security, like a home and retirement?
Amanda Levinson | Director of Policy Programs