Rapidly rising tuition rates at institutions of higher learning have become commonplace for modern American college students. In fact, according to the Institute of Education Sciences, tuition rates adjusted for inflation have risen a stunning 129 percent since 1982, while real median family income has only risen approximately 8 percent. Because of this inconceivably rapid inflation relative to the average citizen’s standard of living, student borrowing has more than doubled over the past two decades, with students taking on mortgage-level debt before most of them are even financially independent from their parents.
While the cost of tuition is going up, the job market for university graduates is stagnant and the real average yearly earnings of a college-age student is only $14,400, a rate that is insufficient to cover enormous tuition costs. Furthermore, college students in 1995, unlike their counterparts today, were paying nearly half as much money for tuition and were facing a lower unemployment rate. Essentially, modern students are faced with the task of paying astronomically-inflated tuition rates during the lowest guarantee of return on investment in recent American history; in a market of incredible inflation and unsubstantiated risk — just like the housing market that ultimately led to the Great Recession of 2008 — something is bound to burst.
Business tycoon Mark Cuban has been one of the most notoriously outspoken opponents of rising tuition rates and student borrowing, going so far as to say that, “It's inevitable at some point there will be a cap on student loan guarantees. And when that happens you're going to see a repeat of what we saw in the housing market… we're going to see that same collapse in the price of student tuition, and that's going to lead to colleges going out of business.”
Sooner rather than later there will come a time where there will be no money left to borrow for students and, as a result, colleges will be forced to lower their rates to such an extent that they will no longer be able to break even on their own business model. Clearly, the United States is on the verge of facing a full-blown educational crisis; the demand for traditional learning will soon greatly exceed the supply, causing the net total of young adults in this nation with diversified, adapted intelligence to fall dramatically. A question must be asked, then: why are institutions of higher learning not adopting policies to quell the impending crisis?
Alarms should be going off in our nation’s legislators’ heads. A change needs to be made before the student loan market has completely collapsed and some of the most renowned research institutions in the world fall victim to the bursting of the college bubble. Currently, it costs the median American family 76 percent of its net income to have its child attend a four-year private institution, meaning under the current system of student loans and financial aid it is practically impossible for the average middle-class family to pay for some institutions without falling into serious financial trouble. For example, a study of the Illinois Monetary Award Program, which provides underprivileged prospective college students with grants toward attending four year institutions, found that 70 percent of MAP-eligible students stated they were not financially prepared for college. This fact alone is a travesty, a clear indication that the system needs to be fixed, for how can we justify the American college system when the choice of attending a four-year institution is based more on financial ability than on an individual’s intelligence?
Take a look at the European system, where an “expensive” college education for an EU citizen is typically no more than 1000 euros, or 1073 U.S. dollars. While these low tuition prices stem from an on-average 46.1 percent personal tax rate, the highest of any sub-region in the world, these rates pale in comparison to the proportion of an American family’s post-tax income that is spent on higher education, which as indicated earlier can total over 75 percent.
What if the United States employed a national public higher education system? What if discounts could be provided to low income families across the nation to attend school, rather than certain demographics in certain states? The benefits of universal, public education far outweigh the costs of the current American college system, which not only places a disproportionate strain on the middle class but is leading the United States directly into the bursting of the bubble, into a dangerously impactful educational crisis that could tarnish the intellectual capital of one of the most powerful countries in the world. It is time for our nation to finally create national, public schools. It is time for our legislators to take a look at the damage that inflated college prices have caused for students and their families across the nation; it is time to make access to higher education a consequence of intelligence, not of personal income.
Ryan Gorman is the Opinion columnist for The Cavalier Daily. He can be reached at r.gorman@cavalierdaily.com.
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