“From 1969 to 2019, the average annual cost of a four-year public school has soared 3,009 percent.” – Andrew DePietro, Yahoo Finance, 2019.
Academia promotes the idea of upward class mobility by way of a college degree, but its ability to provide said mobility has decreased substantially since its inception.
The reality is higher-education cannot guarantee upward socioeconomic mobility because the cost to attend has resulted in 1 trillion dollars of debt.
The government has continuously supported decades of tuition increases without investing in an effective public education system. Currently, the American public K through 12 system graduates remedial students, who often struggle in college. Sadly, many students drop out without a degree and are quickly faced with repayment options, which forces some borrowers to default.
Providing equal access to quality learning institutions is a low standard for a consolidated democracy. Government was hardly asked to fix public education overnight. It’s been 40 years and the same people are singing the same tune.
Higher education has increased in cost but is has not necessarily increased in value.
“In 1979-80, tuition and fees at the UC were $2,200 in 2018 dollars, adjusted for inflation.Today’s students pay more than six times that amount, $14,400 for resident undergraduates. Between 1979 and 2019, tuition and fees at the CSU rose by $6,800 in inflation-adjusted dollars (a 1,360% increase). During the same period, food and housing-related expenses increased by 40%.”
Source: Amy Rose 2019, California Budget & Policy Center
Over the years, and as a result of globalization, the demand for higher education increased. In response to the demand, higher education became less and less affordable. In truth, the cost of tuition increased for several reasons.
For example, although more people began enrolling in college, at the same time state and federal governments decreased their education subsidies, but most importantly — higher education institutions (private and public) were legally allowed to pass costs onto students.
Education and research institutions typically claim tuition increases facilitate their ability to provide a public good, which is mostly a nod to the IRS and their nonprofit tax-exempt status. Nonetheless, many people wonder how these institutions rectify spending millions of dollars on lobbyists while a significant percentage of their students are food and housing insecure.
One wonders how exactly these institutions are providing public higher-education as a publicgood if most students are paying market-rate tuition and covering all of their own expenses.
Public universities are no longer the accessible entities they were created to be. In fact, many of them resemble private institutions, which is a far cry from the beacon of democracy they were meant to be; contrary to popular thought, education is no longer the great equalizer.
What’s more alarming is the fact that the U.S. Department of Education allowed tuition costs to sky rocket, as high-interest rate student-loans soared, while fully understanding citizens are, on average, financially illiterate.
The market devoured an entire generation’s earnings before they even gained employment, and when they finally entered the job market, the employment landscape was not the one baby boomers had promised.
Education is to millennials what property was to baby boomers — it’s our asset.
Most federal funds derive from taxation dollars — that which is funded through fiscal policy. Therefore, when students borrow federal funds for college, they are borrowing taxation funds, which are then repaid with interest or a second tax on the original taxed dollars.
Essentially, the student offers their financial future as collateral to secure an education, but their investment doesn’t become an asset until they’ve repaid their student loans, which is becoming nearly impossible for many people.
Adding insult to injury is the fact that most student loan borrowers can’t declare bankruptcy on student debt. There are a handful of exceptions, but most people are stuck with two choices: pay or default.
It’s time for the federal government to write-off all accumulated federal student loan interest, and reimburse all interest paid towards all federal student loans.
Homeowners are allowed to write-off some of their paid property tax and all of their paid mortgage interest on an annual basis.
On the other hand, student loan borrowers may only “deduct the lesser of $2,500 or the amount of interest you actually paid during the year.”
Paid federal student-loan interest is analogous to paid property tax and paid mortgage interest. We said what we said.
How would you rewrite the student loan deduction? Share your policy proposals with us!