Curing the Disease not Treating the Symptom

The American economy is sick, and its biggest symptom is the 1.5 trillion dollars our Nation’s youth currently owe from student debts (Nitro). [One proposed solution, S.806 (Sanders I-VT) known as College for All Act, was co-sponsored by Democratic Presidential nominees Kirsten Gillibrand, Kamala Harris and Elizabeth Warren. As described by its author Bernie Sanders, a Senator from Vermont, it would pay the tuition for “students from any family making $125,000 or less—about 80% of our population” (Sanders).] A proposal which would cost 600 billion dollars a year, and be funded by a tax on Wall Street, a small percentage of trades of stocks, bonds, derivatives etc.

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would be taxed to fund the proposal. Proponents of the bill argue that the biggest barrier to college is its cost, and by eliminating this hurdle millions of young students who would not have been able to attend a four-year university will now be able to thanks to this bill. Bernie Sanders, the author of the bill, writing “a college degree is equivalent to what a high school degree was 50 years ago” (Sanders). Arguing that in today’s economy a college degree is essential for finding a job that will pay well.

Yet that is all it is, a symptom, a symptom of a bigger problem, and offering to pay for students’ tuition would only make the problem worse. College debt is a part of the college experience, because attending college is an investment, one that requires hard work and dedication to pay off, teaching valuable life lessons in the process. Just as buying a house is an investment, while in the short term it may be cheaper to rent, over time you benefit from buying a house, paying a little now to be better off down the road. Colleges were founded hundreds of years ago to allow privileged youth the ability to further their education beyond the government provided public education. Later colleges were used as an investment vehicle to allow those to pay a little time and money now to get a leg up down the road. By ‘investing’ early on they would hopefully get paid more than their peers and recoup on that investment plus more. As the years went on, and the ability to pull out larger and riskier loans became more prevalent along with the increased demand to attend prestigious universities, prices for colleges skyrocketed with a recorded 30% growth in tuition prices in the last decade (College Board). With the increased fees, a higher loan amount is required causing the average monthly loan payment to jump 42% since 2005 (Nitro). Now with more students attending ever more expensive colleges, leading to an oversaturation of workers entering the workforce with degrees, a degree is no longer rewarded with a high enough salary to justify its costs. This phenomenon has led to a popular phrase amongst college students, “It’s not what you know, it’s who you know,” this is because securing a high paying job is no longer about what you know but who you know because in a world where what everyone knows is the same, who you know reigns supreme.

In the mid 1900’s the demand to attend a university grew as more and more people noticed the benefits of the investment, so in 1965 President Lyndon B Johnson signed into law the “Higher Education Act” (Johnson). In this legislation was a loan program known as Parent Loan for Undergraduate Students (PLUS), which was meant to help aid students afford the price of attending college. The problem with making loans to buy a product easier to get is, the price of the product increases as the demand and ability to secure a loan increases. The most notable example is during the 2008 market crash, in which with the introduction of subprime loans artificial inflated the prices of houses because more people could ‘afford’ to buy them. The same process is happening with colleges, since 1970, 5-years after the introduction of the PLUS loan program, the price per year of a college education, adjusted for inflation, has nearly tripled (Nitro). While the amount given out per year by the PLUS program has increased 271% since its inception (Cooper). Clearly the amount of money given out by the government has a strong correlation with the price colleges are charging meaning if the government gave out even more money colleges would continue to charge more. In addition to the increased school tuition prices the average salary with a college degree has only increased 6% since the conception of the PLUS program (Koncz). So far, more money given to allow students to attend colleges has only led to higher fees disproportional the higher wages.

[Proponents for the College for All Act argue that the price of college tuition increasing won’t be an issue, as with our current loan system students are required to pay back what they borrowed, but with the new system students would be off the hook for college tuition fees.] This statement is true and is why so many people are willing to vote for a Presidential candidate who will put this system in place. This solution however only treats a symptom of the disease, throwing more money at the problem may delay the spread of the disease but will ultimately leads to a worse outcome. Following this proposal to its logical ending unearthed some of the more prominent problems with this solution. The current proposal projects an annual cost of $600 billion a year to be paid for by a “Wall Street Tax” (Sanders). A “Wall Street Tax” is a tax on the average American but only twice removed. More than half of all Americans own some type of retirement fund or have money in stocks (Backman) meaning this tax would in fact affect them. Most likely in the form of increased fees per trade by their broker, meaning in the end you would be on the hook for not only your own college tuition but every other student who attends. Additionally, the price of college tuition is a factor that must be considered, because the current $600 billion evaluation could be nearly $2 trillion in 50-years if the current growth continues. But why should it, the tripling in college tuition was because of the increase in loans available, now college tuition will be ‘free’ meaning the demand to go to college will be at an all-time high and colleges could charge whatever they desire. As the yearly cost of college tuition increases the tax rate must also increase, meaning your increased salary thanks to your college degree will have to give a bigger chunk to Uncle Sam.

If colleges were able to expand and enroll the hundreds of thousands of new students, this would actually raise a secondary issue. While college is a great place to learn a vocation, not all jobs require a degree. But if getting a college degree becomes the new normal, it will force all students to wait another 4+ years before entering the workforce. As mentioned previously, author of the bill Senator Bernie Sanders, cites this standardization of the college degree as a reason for why more people should go to college, however this is a circular argument. More people should attend college because everyone attends college. Douglas Webber, a “Director of Graduate Studies in the Economics Department at Temple University” (Webber), published a paper in the Economics of Education Review titled, “Are college costs worth it? How ability, major, and debt affect the returns to schooling” (Webber 296). In this article he explored the cost of attending a college with varying majors discovering those with a Business and STEM degrees did far better post-graduation than those with other degrees. While earning more is not always a prime motivation for choosing a vocation, your enrollment in college should be determined by your own choices and not forced upon you due to the choices of others.

Lastly, paying for the tuition of students will not allow every student to attend college, as the price of tuition is not even half of the total cost of college (College Board). Tuition for attending college is just one aspect of college debt, as loans need to be taken out for living arrangements, food, and transportation. Meaning cost might still be a factor for some students. Yet as college progressively is seen as mandatory students who would not have attended for a variety of reasons are forced to attend increasing the dropout rate in colleges. Frank Daley a professor and former dean explored, “Why College Students Drop Out and What We Do about It” in his piece for the College Quarterly. Daley expresses his concerns by stating “One of the reasons students fail at college is because they should not be there” (Daley 3). Until the heart of the problem is addressed the disease will not stop spreading, and what Daley states is true, we must address how colleges are viewed and what they can give us rather than what we can give them.

The change in view of college can most prominently be seen with the recent ‘College Admissions Scandal’ in which wealthy parents paid millions of dollars to get their children enrolled in prestigious universities (Taylor). As mentioned previously, colleges were meant to give people an advantage investing time and money now for benefits down the road, but as more and more people enrolled, the benefits began to diminish. To recoup on lost benefits, students began to pay even more to enroll in private prestigious universities, whose lure was exclusivity thanks to rigorous entrance standards. The reason why the ‘College Admissions Scandal’ was so perplexing was that the students who cheated to get accepted, all came from wealthy families, as only wealthy families could afford to bribe officials to get their students in. If the students were already wealthy than why would they need the benefits of college? Because they didn’t go so that they would get a higher paying job down the road, they went because of how we perceive colleges. They wanted to go to a good college just to be able to say they went there, to fit in with how society perceives a person should be. They also didn’t want just any college degree, but degrees from prestigious Universities, ones that they assumed they would not have been accepted into due to the high standards set by the college. The very fact that after these students, who were accepted based on academic merits they did not have, were able to pass classes shows that the prestigious standards set by these Universities only exists to bolster its prestigious and the price it can ask for them to attend.

The solution to this problem is not the legislation proposed by Senator Bernie Sanders, but that doesn’t mean your vote in the upcoming election won’t help the problem. As legislation is what is needed to solve this problem. Currently banks assume no risk when it comes to giving out loans, as it is near impossible to have your student loans forgiven even when declaring bankruptcy. In fact, in 2018 the US Department of Education released statistics on how many loans were forgiven, in which 99% of applicants were denied (Aid). Legislation needs to be passed to hold the banks accountable on the loans they give out. Currently no Presidential nominees are proposing a fix that would cure the disease rather than attempting to solve the symptoms. As an important issue to our nation, it is the responsibility of the voters to tell our legislatures the changes we want and how we want them done, then and only then can we cure the disease.

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