Updated: Sep 22, 2021
By: Tyler Williams
What’s one common fact that a high school senior and a recent college graduate are aware of? College is expensive. The price tags on colleges and universities are so colossal that Ramen Noodles with a soda on the side is the college cuisine. Aside from refund checks, these expenses are a reality check to the average idealist high school graduate. But here’s the $1.57 trillion dollar question, why is college so damn expensive? By the way, that’s the current total amount of debt in the United States.
The University of the People states the following on the origin of how college became one of the big ticket items in people’s lives:
“Past generations were able to pay for college themselves with the hard-earned money they made working over summers. Those that came from more well-off families were able to help their children pay for their education. But in the past few decades, public funding was severely cut, forcing colleges to raise their fees, and in turn, leaving millennials with no choice but to take out hefty loans. The rest is history.”
Did you catch that? Public funding slashed in the past few decades. Now the burning question is when did public funding start getting cut from the state and local budgets? According to the graph below, economic recessions began to occur in the early 1990s. “The state funding cuts and rising tuition that followed the last recession fit into a longer-term trend in place since the 1980s”, said the Center of Budget and Policy Priorities (CBPP).
Perhaps you’re curious about the three recessions that drove up the college price tag? CNBC reports the following recessions that correlates with the chart above: the Gulf War recession (July 1990 to March 1991), the Dot.com recession (March 2001 to November 2001), and the Great Recession (December 2007 to June 2009). “Nearly every state has shifted costs to students over the last 25 years, with the most drastic shift occurring since the onset of the Great Recession”, CBPP states.
So what are some of the proposed solutions to make college affordable to every aspiring college student? The University of Washington writes some proposed solutions by politicians, universities, and organizations. A few of these results were from lawmakers such as Senator Elizabeth Warren and Senator Bernie Sanders on how to abscond from the student loan debt crisis.
The Levy Institute proposes that all outstanding student loan debt should be cancelled. “The federal government would write off the debt for which it itself is the creditor (the majority of outstanding student loans), and it would assume payments on behalf of borrowers for those loans that are held by private lenders. The population’s student loan balance would be reduced to zero—a radical solution to the student debt crisis, but one that deserves serious attention, given the radical scope of the problem”, said the Levy Institute. Additionally, The Institute reports that economists believe that student debt cancellation would be modestly stimulative to the macroeconomy, increasing annual GDP by $86 to 108 billion per year. It would increase the demand for labor and therefore slightly reduce the unemployment rate.
Source: Traction Real Estate Mentors
Here’s something to ponder on, what can you do to avoid becoming part of the rising statistic? The University of the People suggests the following: “Online courses are a great place to start and are just as effective as traditional college. Online learning not only reduces real estate fees, but is also more productive. There is also a new concept known as the two-step college option, in which students start off their higher education at a more affordable college for two years, and then transfer to a four-year program to finish their bachelor’s degree” The University of the People states.
Even though the price of colleges can be scary for a lot of people, it is relieving to know that going to a conventional four-year college or university is not the only pathway to success. The key to success is to have options at your disposal.
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