Education, employment, and good jobs are interconnected issues that are front of mind for many Americans these days. Today some sort of postsecondary education is basically a prerequisite to a middle class lifestyle. It is projected that by 2020 65% of new jobs will require a postsecondary education—that is something beyond the high school diploma.
Serious action is needed to improve wages and create more good jobs across the board. Expanded flexible leave policies, an increased minimum wage, and improved labor conditions are the foundation of a strong labor force. In addition to these policies, efforts to improve educational outcomes are intrinsic to the goal of providing economic opportunity and social mobility to all Americans, and especially those most in need. Of course, not only does increased education lead to better economic prospects for individuals, it provides broad social and economic benefits for our society as a whole.
Currently only 45.3 percent of Americans have some sort of postsecondary credential. And there are serious gaps by race and income. Only 34.2% of African Americans and 26.9% of Latinos hold a postsecondary credential. Fifty-four percent of Americans in the highest income quartile hold postsecondary credentials, compared to only 9% of those from the lowest income quartile.
There are some bright spots in the story of educational attainment over the past few years. We now boast the highest national high school graduation rate ever recorded in the US (81%). However, while high school graduation rates have increased, gaps by race and income remain. And far too many students leave high school needing remediation once they enter college—which further delays progress toward a credential and is costly for students. A recent report found that students are collectively paying over $380 million in student loans for remedial coursework while in college. It is imperative that we improve our nation’s K-12 education system so that students leave high school prepared for college level work.
However, it’s also important to remember that today’s college students are not all teenage high school graduates leaving home for the first time to live on campus. Today’s student is more likely to be older, busier, more diverse and more financially strained than in the past. 38% of today’s undergraduate students are older than 25 and 47% are financially independent. About a quarter of all undergraduate students are parents and about 40% of these students are enrolled part-time often balancing school with work and other familial obligations.
Juggling work, kids, and school can be difficult—and our policies must be designed with today’s students in mind. Moving to a system where students’ needs are the primary motivator of our decisions is critical—not what is best for institutions or convenient for policymakers, but what is best for students and would be students.
To that end, one of the most serious barriers these students face is financial. While paying for college is an increased burden on all but the very wealthy, African American, Latino, and lower-income students are more likely to face financial hurdles to college and special attention should be paid to policies designed to help close educational gaps among these groups.
Now, more than ever in the past, students are likely to borrow to pay for college. And they are borrowing in increasing amounts, at the same time their families are paying more out of pocket. But at this point, these statistics are standard fare. What’s more important to discuss today are potential solutions to help students afford college.
To get at solutions, it’s important to consider what has caused this increased financial burden? Though college tuition prices have risen for a variety of reasons, the past 20 years have evidenced a decline in the per-student appropriation at public colleges—which serve the majority of students in this country. Both a look at underlying cost structures of colleges and an increased public investment will be necessary. The federal government has more than doubled its spending on Pell grants for low-income students over the past 7 years, an important commitment to low-income students across the nation. However, this investment hasn’t been enough to curb the overall trend of increased costs facing students.
To complicate matters further, students at 4-year colleges face higher costs for living costs (like room and board) than they do tuition and fees, so a single-minded focus on reducing tuition won’t be enough to relieve the financial burden student’s face.
Making college more affordable is no easy task. It will require more than simple pledges or promises. The reasons behind the college affordability crisis are myriad and complex, and no simple slogan will fix it. I have three concrete ideas for your consideration today. Making college affordable will require:
Affordability is a term meaning different things to different people, but solutions must be easily understood by the average person in order to be useful. That’s why we at Lumina created a concept called the Affordability Benchmark, which suggests a standard for college affordability based on what students and families can afford. Our concept would require no savings among those making less than 200% of the poverty level. Those making more than this could pay a sliding scale of 10% of their discretionary income for up to 10 years. Otherwise, students would be expected to work no more than 10 hours of week while in school as a contribution to living expenses. This kind of promise would go a long way to helping make clear our national commitment to affordability and focuses on meeting students where they are first, rather than asking students to pay the balance of where other efforts fell short.
This, or any other type of affordability guarantee would require a new type of partnership between the federal and state government in which colleges also commit to lower prices and better outcomes for students over time. This kind of partnership would necessitate clear goals and rewards for success in serving students who are have been historically underrepresented in college. Imagine Historically Black Colleges and Universities receiving extra support for success in graduating African American students with low levels of debt, or regional public colleges who churn out the state’s teachers being finally rewarded for their success. Right now, our system favors elitism and exclusivity, instead of inclusion and success among the changing demographic group of students. Completion of a high quality credential should be the prevailing incentives undergirding of our system—rather than competition for prestige. A national compact for higher education could usher in a new demographic era of affordability, value, and quality in inspiring ways.
In addition to a guarantee or compact around affordability, this kind of total system change will require a better integration of traditional higher education policy with workforce and labor policy, new and more effective ways to ensure quality, and increased transparency for students about what this means for them. The current administration has begun down this path on a number of fronts, including around ensuring quality and connecting workforce and higher education policy–but the work is far from over and it require a strong commitment to see these efforts through to the finish line.
One important point I want to make is that when we don’t prioritize poor people, those with less wealth, and those who face the most severe challenges, their needs do not magically rise to the top. In fact, when we ignore their unique challenge with across the board, one size fits all policies, marginalized students tend to get left behind. We need to make a clearer commitment to those low income families –91% of whom do not receive a postsecondary credential. Those who are most at risk of being left behind in this rapidly changing, knowledge-based economy.
In addition to concerns about affordability of college on the front end, millions of Americans already hold student loan debt which many struggle to repay. Thankfully, new income-based repayment and forgiveness options championed by the Obama administration can help borrowers. However, there is still work to be done.
I’d like to take a moment to reframe the nature of the student debt challenge a bit. While we often imagine that those struggling most with student loans are those with six figure debt, this is a small percentage of the total student loan portfolio. The average balance of a loan in default is actually lower than the average balance of a loan in repayment, suggesting that those most in risk of default are those who never completed their degrees in the first place. So, the college completion crisis only exacerbates this student loan challenge. The answer must involve increasing completion rates so that we don’t have so many students with debt and no degree.
In addition, strengthening and streamlining income based repayment options and improving student loan servicing will go a long way to helping students who struggle with student loan debt take advantage of forgiveness and relief programs. These protections are absolutely necessary for a robust student aid system and key to any college affordability platform.