We are living with many post-COVID aftershocks–some more harmful, surprising, and unexpected than others.
And while unemployment keeps dropping, we have a new problem. There are currently 9.8 million job vacancies in the U.S., and employers are having a hard time filling them with willing workers.
The Biden Administration keeps ramping up federal spending on benefit programs. The administration also recently moved to extend moratoriums on rent and student loans.
We are facing a student loan cliff.
The student debt load now totals an all time high of over $1.57 trillion, and although student loan relief has been extended, the debt obligation still exists.
Moratoriums are a temporary, artificial bandaid masking the true seriousness of this dilemma facing young and middle-aged people. D.C. politicians want to take a bow for bringing relief and “doing something.”
Today, over 54% of all college students have taken on debt. The average debt amount is $37,584.
Is this a permanent, growing inflationary problem? Or can we do something about it?
It is certainly true that “investment in knowledge pays the best interest.” But will today’s college education costs instead put young people on a new “road to serfdom”?
If you think our recent everyday inflation concerns are a problem, take a look at the pace of tuition costs over the last generation.
Tuition changes over the last 20 years (2000 to 2020) show that:
- The average tuition and fees at private National Universities have jumped 144 percent
- Out-of-state tuition and fees at public National Universities have risen 165 percent
- In-state tuition and fees at public National Universities have grown the most, increasing 212 percent
Compare those price increases with the consumer price index inflation which rose by only 50 percent from August 2000 to August 2020.
Over the past 30 years, the average cost to attend a public four-year college has nearly tripled, and it has more than doubled at private universities.
The moral hazard surrounding student debt cancellation proposals has meant that solutions to this growing problem remain elusive.
Much blame for soaring tuition costs is blamed on lackluster state higher education funding, but this is only marginally true in a few states.
As the cost of college tuition continues to soar and as inflation continues steadily– what will happen to children (and parents) planning for college in the next 10 years?
A frightening picture awaits middle and lower income families. Let’s look at just one example where we assume, say, there is a six percent increase in inflation over the next decade.
For the class of 2032-33, this is what that would mean: a 4-year public college education starting at $48,315 and a private college or university totaling $109,675.
A moratorium today will not help this trajectory. We need more creative answers if we are going to narrow the future education and wealth gap.
Of course, a college degree has been the 20th century ticket to climb the ladder to professional success.
But now is the time to stop penalizing those that do not or can not afford to attend college. As free market proponents, we must advocate for 21st century educational alternatives more aggressively in this astonishing age of digital transformation, including advanced trade schools, apprenticeships, evolving online learning tools, and entrepreneurship. The ideas are out there.
Creative free market thinking has been America’s calling. Let’s build it to new levels in supporting cost effective solutions to elevate and educate our younger generations.