Ambrose Bierce once quipped that a university is "a modern school where football is taught." A quick review of the Saturday afternoon television schedule would tend to support this theory. The reality, of course, is the monetary value of a college education can be directly measured in its positive benefits to the nation's overall economy.
The numbers compiled by the U.S. Census Bureau supports what every American already knows, a college diploma significantly increases earnings by anywhere from twice to four times as much as workers earn with only a high-school diploma, depending on the type of degree. In a shrinking economy with a middle-class burdened by the extraordinarily high costs of college tuition in the United States, the best investment we can make for our long-term fiscal health is in increased access to higher education. The resulting higher earnings across the board would result in an expanded middle-class, significantly increased tax revenue for the federal government, and potentially a lower overall tax burden for everyone.
McCain states on his election website that "higher education is as much a part of that competition as the job sector, and we must rise to the challenge and modernize our universities so that they retain their status as producers of the most skilled workforce in the world." Obama argued in a November 2007 speech at Bettendorf, IA that a college education is "the best investment we can make in our future." He reiterates this claim on his website: "To be successful in the 21st Century economy, America's workforce must be more innovative and productive than our competitors. Giving every American the opportunity to attend and afford and be successful in college is critical to meeting that challenge."
While both candidates agree on the value of higher education for Americans in a new global economy, they differ significantly on how to help American's afford this vital investment in our future.
Barack Obama notes that the current Free Application for Federal Student Aid (FAFSA) is "five pages and 127 questions - making it longer and more involved than many federal tax returns." He proposes eliminating the current FAFSA process altogether and allowing parents and students to merely check a box on their tax returns to apply for financial aid.
John McCain proposes consolidating financial aid programs, but avoids specifics: "The number of programs also makes it more difficult for financial aid officers to help students navigate the process. Consolidating programs will help simplify the administration of these programs, and help more students have a better understanding of their eligibility for aid."
Obama proposes increasing the amount of Pell Grants to college students, tying annual increases to the rate of college inflation. He often repeats in press releases and speeches that his first bill introduced in the Senate, as part of the Health, Education, Labor and Pension Committee on which he sits, was for an increase in Pell Grants to college students. That specific bill did not move forward, but another version produced in the committee with his help did make it into the 2008 budget as the College Cost Reduction and Access Act, which increases annual Pell Grants from $4,300 to $5,100 over five years. The Act passed overwhelmingly in both Houses, with the Senate approving it by a vote of 79 to 12 with nine abstentions. John McCain was one of the 12 Senators who voted against the act.
PRIVATELY FUNDED STUDENT LOANS
There are currently two types of loans available to college students, the Direct Loan System funded directly by the government, and the Federal Family Education Loan Program funded by private banks that receive federal subsidies and guarantees from the government. These private loans have generated a great deal of controversy in the past few years, with loan administrators directing students to banks in which the administrators have financial interests, and rates that resemble high-interest credit cards. Obama argues the private loans achieve the same effects as the Direct Loan program but at higher costs to both the government and students. He proposes abolishing the private loan program and directing the savings into increased financial aid for students.
John McCain favors the privately funded loan program and proposes expanding the "lender-of-last resort capability." He wants to address the ethics violations of these lenders through reform and rules of conduct for participating lenders. He argues, "leveraging the private sector will ensure the necessary funding of higher education aspirations, and create a simpler and more effective program in the process."
EDUCATION TAX CREDITS
Obama has proposed the American Opportunity Tax Credit, which will provide a fully refundable $4,000 credit every year for parents with students who attend college full time. Students who receive this benefit will be required to perform 100 hours of community service either during the school year or during the following summer months.
McCain favors simplifying the existing tax credits available that many families do not apply for. These two tax credits are the Hope Tax Credit and the Lifetime Learning Tax Credit. The Hope Credit covers up to $1,650 per student for households earning less than $114,000 per year. It is only available for the first two years but there is no limit on the number of students a household can claim. The Lifetime Credit covers up to $2,000 per year for all years, but is restricted to courses aimed at improving job skills. It also phases out for households earning more than $114,000. Families cannot apply for both credits in the same year.
Obama has proposed the Community College Partnership Program aimed at increasing grant funding to community colleges for improvements in workforce training, increased associates of arts degree programs, and rewards for graduation rates and transfer rates to four-year institutions. The program would focus heavily on helping community colleges train students in the skills necessary for local industry. McCain has also promoted increased funding for community colleges to increase enrollment in math and science programs as well as early teacher education programs.
Both candidates have also proposed increased funding for teacher education programs at the university level, increased transparency of university spending for parents and students, and increased federal support for college readiness programs in secondary education. Barack Obama proposes increasing funding and providing service jobs in underperforming schools in exchange for tuition and grants. McCain has proposed designating a percentage of the existing Title II funds specifically for teacher education in math and science.
With the focus of this election on the economy, it's curious that neither candidate is promoting their higher education programs more vigorously as long-term solutions for America's economy and global competitiveness. The problem may be that solutions requiring such critical thinking skills are rarely effective in national races where lipstick, Pit Bulls and pigs take center stage.
This week OffTheBus is publishing a variety of stories that cover the policy differences between Senators John McCain and Barack Obama. If you have a policy expertise and would like to participate, please see Calling All Policy Gurus.