Many young Americans graduate from college with staggering educational debt. This is harmful to our economy in several ways. Young families must put off home ownership for many years, and their participation in the economy as consumers of goods and services is sharply limited, while financial institutions reap interest at rates truly unconscionable for loans that have zero risk because they are guaranteed by the federal government and cannot be escaped through bankruptcy. While higher education should be a path to upward economic mobility and thereby serve to reduce the inequalities in distribution of income and wealth in American society, educational debt severely limits those effects.
We decided that education through high school should be compulsory – and publicly funded – during the period between the World Wars. In 1910 only about 1 in 5 students enrolled in high school, and only about half of those graduated. By 1940 three quarters of American youth enrolled, and more than half earned a high school diploma.
A high school diploma, even in the immediate post-WWII era, was a ticket to a good job. But we moved forward with the GI Bill, and the proportion of Americans entering institutions of higher learning and earning college degrees began to climb.
These days a high school diploma is no longer enough to make a young American competitive in the job market, at least not for anything beyond unskilled labor. A good job requires additional knowledge and skills.
Our societal goal should be for young Americans moving from adolescence to adulthood to be qualified for good jobs. At the time we decided to pay for K-12 with public dollars, a high school diploma was enough for that. We should revisit the question of public funding of education with the understanding of what it takes now.
Some advocate a period of national service – say, two years in the military or some other kind of public service work – to earn publicly funded higher education. While that has obvious appeal to those of us who don’t like the idea of anyone getting “something for nothing,” it misses the central point in the discussion of this issue: publicly funded higher education benefits the whole nation, not just the individuals who obtain that education. Further, we do not have enough military jobs for everyone who wants to go to college, and other kinds of “national” service employment would cost public dollars, too. The return on that investment is doubtful at best.
It is time to fund post-secondary education – community college, trade school, or a baccalaureate program at a public college or university – with public dollars. We must have a well-trained and well-educated workforce for the benefit of the economy, Americans’ standard of living, and the broader value of having an educated population. It will make us more competitive in an increasingly global economy.
For those who are already further along, having graduated with staggering debt, we must develop programs to help them, so that they do not continue to struggle just because they were born five or ten years too soon.