Vicious Cycle

Yesterday "Inside Higher Ed" featured an editorial addressing the cost of college in an upfront manner. Kevin Carey sees the relationship between the rising cost of college and private student loans to be co-dependent. The article relates how he encountered a cheerful group of college loan lenders trying to attract students with Frisbees and pens. They were peddling debt and, as he outlines it, the way they do it helps to exacerbate the rising costs of college. He brings up some good points; the availability of student loans combined with their proven profitability shoulders students with a college debt that can hound them for the rest of their lives. Because college loans are presented in a cheerful way they leave no incentives for schools to keep cost down. Carey writes, “The rapid expansion of student debt, combined with the soft-pedaling of debt’s true meaning has served to forestall higher education’s inevitable day of reckoning when it comes to price.”In short, as long as students can get the loans, colleges can charge what they want and not have to pay attention to the bottom line.

In conversations that Public Agenda has had with college presidents, most say they are working to keep the bottom line down, but costs continue to rise and Americans are beginning to have doubts about whose best interest colleges have in mind. As reported in Squeeze Play: How Parents and the Public Look at Higher Education Today, half of Americans (52 percent) believe that colleges are like businesses and mainly care about the bottom line, as opposed to education. And going along with Carey’s concerns, 78 percent of Americans believe that students have to borrow too much to go to college – 60 percent saying they believe this “strongly.” Meanwhile, 62 percent of Americans believe that many highly qualified, motivated students don’t have an opportunity for higher education.

With a nation concerned about debt and opportunity – and especially in tough economic times – it seems like both institutions, the student loan industry and higher education need to do more to gain the public’s trust, both in the short term and in the long term. These industries also need to recognize, as Carey mentions, that education is not a private good. The benefits of an educated individual extend beyond just that person and into the public sphere. The more educated a person is, the better it is for everyone. But by making education financially unattainable, especially without the aid of nearly insurmountable debt, our collective future is threatened.