I met a young woman who had graduated from college two years ago. She went to a great school, so I asked her how her education was paying off. She said that she wasn't sure yet. She was carrying so much debt she had to move back in with her parents and work three jobs. Not one of them was connected to her major.
The fact is the cost of higher education has increased five times faster than median incomes over the last thirty years. Five times. For all of the lip service paid to increasing access to higher education, it's become more and more difficult to afford. The average graduate carries $20,000 or more in debt upon graduation. That is life-altering debt for a 22 year old in a good economy; even more so in a bad one. For entering students, this often means attending less expensive schools for two years before transferring to more expensive schools. For graduating students, it often means moving back in with their parents and postponing their career indefinitely. According to a recent CNN article, over 80% of graduating classes in 2009 moved back in with their families after college.
This is part of a disturbing trend. While the cost of college has been increasing, the graduation rates for students have been declining. America used to be number one in graduation rates but now we rank below the world average. If we're going to get this trend turned around, making college more affordable must be part of the solution.
In fact, President Obama and Congress just passed legislation as part of the health care bill that aims to address this issue. The measure overhauls higher education financing by doubling funding for Pell grants, and allowing students to borrow directly from the government instead of a "middleman." It eases payment structures for graduates, caps loan repayments at 10% of the graduate's salary and invests $2 million in community colleges. It also saves $68 billion by cutting out the financial institutions that manage these loans.
Investing in higher education is key to increasing our competitiveness and ensuring we have the gold standard of workforces in the world. In today's world, students are competing with China, India, and the rest of the global economy for their job and we need to give our children every tool possible to succeed.
Next, we have to control the spiraling costs of education. While we continue to invest in education, support schools, teachers and students, we must also ensure that we hold these institutions accountable for their budgets, cut wasteful spending, and focus on educating our students in the most cost-effective way. We need to use every tool in our 21st century arsenal from more class offerings to distance and e-learning.
The young woman mentioned earlier deserves to be rewarded for her choice to enter public service as a teacher, not punished by crushing student loans. We should make more investments in professions like teaching, public service, public safety, and community outreach. Opportunities, such as loan forgiveness and public service for credit, could help her begin public service and help train the next generation of workers.
We are going to compete and win in a global economy if we have a workforce that can get out of the starting gate. Affordable higher education is the key.