"Our economy can't afford the trillion dollars in outstanding student loan debt, much of which may not get repaid because students don't have the capacity to pay it." President Obama recently said this during his economic road trip in Buffalo, New York, and Americans wholeheartedly agree. Not only are the costs associated with higher education too high, but also the economic rut we are in does not foster an environment for students and recent grads to pay back their loans.
Recently, YG Network conducted focus groups with middle-class Americans throughout the country, and many individuals have said that the costs of higher education- as well as everyday costs- are rising, but they are not faring better economically. When considering problems facing the middle-class, respondents said the following:
• The "[c]ost of living is going up- groceries, gas, food, and tuition." -- Phoenix
• "Higher education is too expensive and putting too much burden on kids." -- Minneapolis
• "The debt I am in makes me sick to my stomach. The thought of funding my children's education seems impossible." -- Phoenix
It's understandable that Mr. Obama would be concerned about the rise of higher education. After all, on his watch, "the tuition sticker price at public four-year colleges is up 27 percent beyond overall inflation," according to the Associated Press.
It's encouraging that the president is on board with making colleges and universities more transparent in their costs, graduation rates, and the success of grads -- thereby allowing families to make the best-informed decision when choosing a place of higher education. It's a concept that YG Network has been advocating for months. In March, we conducted a national survey that found that "nearly nine in ten (88 percent) favor providing parents a full breakdown of college tuition costs, including 66 percent who 'strongly favor' this proposal." Additionally, 85 percent favor providing prospective college students with reliable information such as employment rate and potential earnings. (We invite President Obama and his allies to check out other policy ideas of ours, too.)
The goals of transparency and accountability in higher education are both worthy and necessary. However, it is short-sighted and naïve to think that broader economic issues aren't at play as young Americans struggle to move ahead with their lives.
In Buffalo, President Obama said it was critical that students "are prepared for whatever comes next" after college. But it doesn't do much good for a recent college graduate- likely laden with debt-if they try to enter the workforce in a broken down economy. As CNN contributors recently noted, "[l]arge numbers of recent graduates are still out searching for their first full-time job, years after their own commencement celebrations held years ago." And for those grads that are fortunate enough to actually find work in this sluggish labor market, a whopping 36.7 percent are not employed at jobs that even put a college degree to use.
The employment outlook for millennials is grim on several levels. For one thing, it means they are unable to escape the confines of Mom and Dad. According to Pew Research, "[i]n 2012, 36% of the nation's young adults ages 18 to 31 -- the so-called Millennial generation -- were living in their parents' home." This figure "is the highest share in at least four decades." Talk about being unable able to fight for your right to party because you're stuck at home.
Young people are also having a harder time entering the workforce (and subsequently paying off their student loans) because of burdensome laws like Obamacare. According to Reuters, "Obamacare appears to be having the most impact on hiring decisions by small- and medium-sized businesses." Employers are cutting back hours of workers to less than 30 hours per week in order to duck penalties from the law. Who is going to be able to legitimately pay back their student loan if they start their career at a job that lets them work only 29 hours a week?
The Obama economy is not giving young people a fair shake. While it's important to promote transparency and accountability within the education system, it's even more important to care about the big picture: young Americans deserve meaningful, full-time work. Bus tours around college campuses will not make the future better for students and recent grads. Only smart policies that encourage a strong private sector will take millennials to the next level.