Roosevelt Institute | Cornell University

The Price is NOT Right

By Delphi CleavelandPublished February 25, 2016

Student loan debt totals nearly $1.3 trillion. Next to home ownership, college education, is one of the most expensive investment Americans will make in their lifetime. The soaring prices of college tuition in the United States have resulted in an anxious and imbalanced economy, in which prosperity belongs to an increasingly shrinking group. As wealth is evermore stratified, the growing need for accessible education becomes increasingly transparent. But how?
    The access to education has repeatedly been identified as being one of the great staircases of social mobility in the United States. Throughout American history it has proven to successfully enable the upward mobility of previously marginalized demographics. This allows people who may otherwise have been desperately stagnant in poverty, to create a more stable life for themselves and their families. However, as today's competitive job market mandates a bachelor's degrees on the first line of any applicant's resume, there appears to be a caveat hidden in the statistics of this economic shift.

Four decades ago, far fewer people were seeking higher education, with roughly 50% of the population attending college. Painting the larger economic landscape, in the 1970s, the median family income was roughly $13,000 per year, a house averaged $36,000 and the price of attending a private four-year college was $2,000 per year. College was not a requirement to enter the labor-force. Fast-forward 40 years into the future; the inflation of home values matches closely to the increases in average family income, with both having risen by about two-thirds. Where the largest discrepancy lies, is in college tuition. In 2014, the average annual tuition for a public four-year college was $9,000 per year, while private schooling priced $31,000 annually.

    Many of the most affluent Americans today, became wealthy after graduating from a prestigious university or post-secondary institution. The composition of the United States Congress for instance, exists as proof. Following in their parents footsteps, the children of this wealthy class, are likely to be enrolled in only the most elite —and most expensive—schools. These "academic 1 percenters" have resumes nurtured by counselors, embellished with networked internships and summer camps, and their SAT scores are perfect, after spending long-hours with a private tutor. This class understands the system, and it works for them.

    On the other side of the socio-economic spectrum, many working-class families have yet to graduate a member from college. The prospect of having a child achieve admittance, is accompanied with the worries of price tags, lumped on-top of bank loans and electricity bills. This class of people does not know the system, let alone how to work it.  

    In 2013, President Obama unveiled a proposition for more affordable post-secondary schooling for all Americans. His plan was publicized as "A Better Plan for the Middle Class." The proposal included provisions such as, increasing the maximum Pell Grant funding -- which has been diminished to the lowest value in history-- and the establishment of American Opportunity Tax Credit. Further, the president introduced a revolutionary framework whereby colleges and universities are ranked across a collection of data points --i.e. overall happiness of students, graduation rates, percentage of Pell Grant funding, affordability, etc. These points are to be made easily accessible to prospective students, and are to be simultaneously used to determine federal and state funding for the schools. The President's framework has the potential to positively enforce healthy competition among schools and increase their accountability to the source of their funding.

    While the immense potential behind President Obama's higher-education reform is presumably impressive, his term as Executive is time-sensitive and it is likely the issues of reform will be left in large-part to the President's successor. As such, the topic has woven itself repeatedly into campaign dialogue and it appears to be one of the few bipartisan concerns. Republican candidate Donald Trump has been quoted as saying "I'm going to look into colleges. … We're going to do something with regard to really smart financing." Taking the cause one step further, Senator Bernie Sanders (D-VT), has proposed a bill to Congress which seeks to universally eliminate college tuition for all Americans. Both sides have been met with voter criticism.

    The reality remains that students are being smothered by debt. The currents of capitalism in modern American society have resulted in the  paradoxical necessity for higher education at unaffordable prices. Paired with the cyclic trends of wealthy families, who maintain the luxury of sending their offspring to the most prestigious institutions, the income gap continues to widen. Access to higher-education for all Americans may be more than a socioeconomic staircase. The potential to awaken and enrich more minds, can only further the nation's proliferated prosperity.