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College Students Face Tuition Hikes, Debt and Disinvestment

Roger Bybee Mar 6, 2012


"Higher education is supposed to be the great equalizer in America,” ruefully noted Charity Schmidt, a University of Wisconsin grad student in sociology and activist in the Teaching Assistants Association union.”It’s supposed to be fostering equality and democracy.”

But these days, higher education is acting to reinforce rather than redress America's inequities, she said. “We’re seeing higher tuition every year, the cost of living is going up, and the cuts in healthcare coverage are all making our economic survival as teaching assistants much more difficult,” stated Schmidt, who wrote a chapter in the new book It Started in Wisconsin about her union’s fight against pay and benefit cuts imposed by Gov. Scott Walker in his successful legislative effort to effectively cripple public-employee unions.

Rising tuition represents an enormous hurdle, according to former Labor Secretary Robert Reich:

Tuition at public universities began climbing [in the 1980’s]. By 2005, it was more than 10 percent of median annual family income. Now it’s approaching 25 percent—still a good deal relative to private universities (where it’s nearly 70 percent), but high enough to discourage many qualified young people from attending.

Public higher education has been the gateway to the middle class but that gate is shutting – just when income and wealth are more concentrated at the top than they’ve been since the 1920s, and when America needs the brainpower of its young people more than ever.

Further, financial aid covers a shrinking share of educational costs for poor and working-class kids, as Reich notes.

State governments—especially those ruled by Republican zealots like Wisconsin’s Scott Walker and Florida’s Rick Scott—are slashing state aid to the university systems while continually lowering corporate taxes. Walker, for example, sliced university funding by $250 million while ramming through $1.2 billion in new breaks for corporations over the next decade.

Both students and their parents have been afflicted by falling wages and net worth, an increasing reliance on loans and the resulting debt burden that students face upon graduation. Total student debt has soared to $550 billion according to the New York Federal Reserve Bank. Graduates in 2011 carried an average of  $22,900 in debt, with graduate students much more heavily in hock.

Schmidt, for example, found herself having to take out loans despite working as a teaching assistant for the fall and spring semesters and thereby getting a tuition “remission. “In 2010, I made $13,600 after taxes were taken out,” she recounted. “My student loan debt for the year was more than that.”

With all these economic pressures walling off higher education to more and more potential students, the United States is now quite predictably lagging behind other nations in the number of college graduates, according to Sam Pizzigatti's superb online newsletter Too Much:

A half century ago, the United States literally “invented” higher education as a mass phenomenon. For years, the United States sported more college grads than any other nation. The United States, on college grads, now ranks ninth. 

Weighed down by tens of thousands in debt, college grads must find a way to survive in an economy where opportunities have shrunk for grads. The New York Times reported:

The jobless rate for college graduates under age 25 has averaged 9.6 percent for the last year; for young high-school graduates, the average is 21.6 percent. These figures do not reflect graduates who are working but in low-paying jobs that do not even require a diploma. Such poor prospects in the early years portend a lifetime of diminished prospects and lower earnings—the very definition of downward mobility.

The situation confronting college students is thus replicating the inequities in the larger economic system. Pizzigatti writes:

Back in the mid-20th century, colleges and universities helped America beat down economic inequality. Now they reinforce it. … Inequality in society at large has nurtured the gaping inequality we now see in higher end—and this inequality in higher ed is driving society at large ever more unequal.

American higher education, in effect, is increasingly working only for the rich. 

But a more highly-educated population—the “solution” to the offshoring of family-sustaining U.S. jobs touted by pro-globalization pundits Thomas Friedman and Fareed Zakaria (see here and here)—cannot possibly compensate for the absence of good jobs.

We're confronting a new situation: the "job creators" are disinvesting in U.S. job creation, as GOP governors, whose campaigns for office are largely bankrolled by CEOs, disinvest in their respective states' higher education system. As Friedman himself admitted,

In today’s flatter world, many key U.S. companies now make most of their products abroad and can increasingly recruit the best talent in the world without ever hiring another American.

This article was originally published by In These Times.

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