By Stephen Smoot
Recently, the Supreme Court ruled that President Joe Biden overstepped his Constitutional bounds in offering student loan forgiveness Many have argued that it would generally benefit the more affluent. According to a Brookings Institute report, “almost a third of all student loan debt is owed by the wealthiest 20 percent of Americans and only eight percent by the bottom 20 percent.”
One of the problems comes from the higher education community taking advantage of easily provided credit to students. After 1993, the federal government moved toward a public directed loan program that offered credit to almost everyone attending college under a certain income level. It took no account of whether or not the degree would lead to a job that could pay for the loan.
Additionally, states such as West Virginia initiated scholarship programs that would pay the tuition of students who hit grade and standardized testing benchmarks. This created even less incentive for higher education in these states to adopt responsible tuition and spending rates.
Also, the environment created a situation in which colleges and universities often raised tuition drastically ahead of the rate of inflation.
According to BestColleges.com, in 1963 the average total cost of a year of college, including everything, came out to just over $10,000. By 2020, that average cost sat at $26,000.
Even worse, four year colleges between 2000 and 2020 “jumped from roughly $13,000 a year to over $21,000 annually. Four year public college yearly costs have gone up 64 percent over that time. Two year schools do not perform much better. Their cost only jumped 59 percent.
Also, tuition and fees at colleges and universities actually dropped between 1973 and 1980.
Academics are often fond of pointing out predatory private sector practices, but ignore the impact of how higher education conducts itself. Low income and other students are encouraged to go into debt, but are rarely encouraged to select a degree that can lead to a field capable of paying off the loan.
As tuition jumped at many state schools, the West Virginia State Legislature generally, and wisely, limited increasing state funding while higher education continued to ask students to pay more.
What did colleges do with the windfall? In many cases, it did not go to the classroom. An Inside Higher Ed opinion piece revealed that professor salaries remained essentially flat in recent years, only barely outstripping the rise of consumer prices in the same period.
“Faculty members are working harder than ever, but their pay “has barely budged in four years,” an American Association of University Professors study revealed.
Colleges and universities seemed to spend and create programs as if their economic sector would always grow, but the reduced value of degrees has led to a drop in college attendance across the nation. West Virginia University attendance, for example, is expected to dip from 26,000 to just over 25,000 students. The university expects a $45 million budgetary shortfall as well.
Beyond tuition, fees, and federal largess, state governments fund a large share of the nation’s colleges and universities. Many states ought to consider a full audit and accounting of public funded higher education since the federalization of student loans to see what money from the massive tuition spikes led to, and whether or not taxpayers approve of these expenses.
Moreover, because higher education’s predatory pricing contributed mightily to the student loan crisis, the field should take a place at the front of the line of both accountability and also contributing to the solution.