MSNBC Sees the Light on Student Loans
For too long, many in the media have derided higher-ed reformers, attempting to marginalize them as anti-intellectuals intent on transmogrifying America's world-class universities into diploma mills. But now, it appears, the jig is up. From across the ideological aisle comes the MSNBC article "Forget student loan debt -- rising tuition costs may be the real problem." The piece rightly dismisses Congress's focus on student-loan rates: "The larger problem isn't the loans. It's the cost of the education itself."
Amen to that, say reformers, who for years have been attempting to steer the debate over student-loan debt in a more reasonable direction. For example, in 2011, economist Richard Vedder warned, "In 2009, spending by Americans for post-secondary education totaled $461 billion, an amount 42 percent greater than in 2000, after accounting for inflation. This $461 billion is the equivalent of 3.3 percent of total U.S. gross domestic product (GDP) and an amount greater than the total GDP of countries such as Sweden, Norway and Portugal."
To this the MSNBC piece adds another disquieting data point: "From 1950 to 1970, sending a member of your family to a public university cost you four percent of your family's income; in 2010, that number nearly tripled to eleven percent." Another study argues that tuition over the last two decades has increased four times faster than inflation, outstripping even the increases in health-care spending. It finds that, in 2010-11, in-state tuition and fees at public four-year schools averaged $7,605, and total academic expenses for one year averaged $16,140. At private four-year schools that average was $36,993. Families can now expect to pay about $65,000 for a public four-year degree and nearly $150,000 for a private four-year degree. In comparison, the median and mean prices of new homes sold in the United States as of October 2011 were $212,300 and $242,300 respectively.
Although MSNBC may be just now getting it, a recent report by the educational lender Sallie Mae reveals the public has been on to the tuition scandal for some time. Surveying college students and their parents, the report finds them increasingly cost-conscious. The average amount students and their families are paying for college has fallen for two consecutive years. "American families reported taking more cost-saving measures and more families report making their college decisions based on the cost they can afford to pay."
Accordingly, MSNBC is dead-on in concluding that crushing student-loan debt is but the effect of which skyrocketing tuition is the chief cause. And while "just" an effect, what an effect it has become: For the first time in history, total student-loan debt is higher than credit-card debt, reaching $1.2 trillion. In 2012, two-thirds of college graduates had outstanding loans, and those loans averaged more than $25,000. (In 1993, fewer than half of bachelor's-degree recipients graduated with debt.) A 2013 study reveals that, between student loans, credit cards, and money owed to family members, students graduating in 2012 faced an average $35,200 in college-related debt. Little wonder, then, that the Federal Reserve reports that 35 percent of 25-year-olds with student debt were at least 90 days late on their loan payments, up from 26 percent in 2008. The effect of all this is lethal to the American dream -- buying a home and starting a family are increasingly distant options for young graduates.
Reacting to this news, The Washington Post's Ezra Klein, appearing on NOW with Alex Wagner, agreed with MSNBC's conclusion that the focus on student-loan rates is misplaced. "At some point," he cautioned, "we actually need to stop costs from rising so quickly or we're never going to be able to afford this."
Texas governor Rick Perry would agree. In fact, he said all this back in 2011, when he challenged Texas public colleges and universities to craft four-year degrees costing no more than $10,000, including fees and books. Thus, amid all of this depressing news about tuition hyperinflation and the resulting, crushing student-loan debt, the good news is that both sides of the aisle now appear to be coming to agreement about the real culprit in all this -- the unsustainable increase in college costs. MSNBC and Ezra Klein are now echoing the case long made by reformers: American universities must learn to do more with less -- like many American families in the "new normal" of economic malaise.
Thomas K. Lindsay directs the Center for Higher Education at the Texas Public Policy Foundation and is editor of SeeThruEdu.com. He was deputy chairman of the National Endowment for the Humanities under George W. Bush. He recently published Investigating American Democracy with Gary D. Glenn (Oxford University Press).