Chapter 4 + Everyday Life: Political Economy Student Debt Seerage student debt has increased, although about one-third of students receiving a bachelor’s degree ane no student debt. The median student debt was $19,999 in 2007-2008 for Bachelor’s degree gradu- ss. an increase of 5 percent from 2003 to 2004. These figures from the College Board, however, did not sctade parents’ borrowing, credit card debt, informal loans from relatives or friends, or loans for graduate stool (Lewin 2009). Regarding student debt, the old rule involved parents providing their children with a good education order for them to be upwardly mobile in society. The expectation was that with the child working during ‘Se summer and parents providing support through their savings and their current earnings, the children sald get a college education and a steady job without anyone acquiring major debt. However, the new we suggested that a rather large portion of the college education would be funded through loans. Tuition mereases as states cut back on funding their public universities and that helps drive the costs of schooling = Young people wanted to attend college in part because, during the GR, jobs were hard to find and the gs of youth without a college degree have declined. A quite likely scenario under the new rules is, ‘Get the student graduates and finds a job that prevents downward mobility, but there is no guarantee that Sere will be upward mobility (Leicht and Fitzgerald 2014: 5~7). Students and their parents may both ex- perience debt due to the high costs of education. Student debt was in third place at $506 billion in 2008 regarding household debt, but moved to ind place at $1.34 trillion in 2017 (Davidson 2017). According to Hillman and Orosz, (2017), the fed- student loan system started in 1965 when the Higher Education Act was authorized. At that point, ‘owing was rather uncommon if one compares it to current times. There are direct subsidized and ¢ unsubsidized loans. The former are available only to undergraduates with financial need, and the ernment rather than students pays the interest. There are also Parent PLUS loan programs and Gradu- = PLUS programs available based on credit checks. Student loan debt involves 41.5 million Americans in the last ten years, this kind of debt has tripled. The median debt balance is approximately $14,245, snd about 40 percent of undergraduates take out a federal loan annually, but there does not appear to be s=y typical student debt experience. It is estimated that earning a college degree results in, on average, a $530,000 benefit over one’s lifetime. Text box 4.5 discusses the possibility of having tuition-free colleges. TEXT BOX 4.5 Should Public Colleges and Universi ss Provide Free Tuition? During his 2015-2016 campaign for the Democratic Party nomination for President, Senator Bernie Sanders Democrat Vermont) proposed that tuition should be free to all attending public colleges. Instead of relying mainly on government, Hillary Rodham Clinton proposed her own plan later in 2015 that expected families to make a “realistic” contribution to tuition and expected students to contribute by working ten hours per week (Healy 2015). President Donald Trump during his 2016 campaign proposed a repayment plan that would cap a student's monthly payments at 12.5 percent of their earnings and have the unpaid balance forgiven after fifteen years (Price 2016). In 2017, Senator Sanders modified his ideas and introduced legis- lation that would provide free tuition to all in-state students at community colleges, as well as for those in four-year public schools if their families earn less than $125,000 a year (Lobosco 2017). Some states and cities have already introduced and/or adopted their own programs related to free tuition at public schools. (Continued) 155156 Chapter 4 + Everyday Life: Political Economy Pro Winograd (2016) fears that with rising student debt, the United States is abandoning its traditional histor- ical commitment to education. He believes that U.S. economic success depends on a highly educated anc skilled workforce that is able to compete in the twenty-first-century international economy. He sugg tuition-free public schools are needed to encourage millennials and others to complete their college edt: cation in order to be able to achieve upward econornic mobility and ensure that the United States does no: lose its global competitive edge. Others argue that all students should have the opportunity to attend college, and providing free tuition would be one means to help level the playing field for students who are currently underserved colleges. Santiago (2016) maintains that such a program would especially improve the access of Latinos « College in part because many Latino families currently don’t even consider attending college because of the high cost. Goldrick-Rab (2016) maintains that targeting financial aid to low-income students is not sufficien: as it provides 100 little to too few. Families get divided into two groups: (1) those who are deserving of 2 but don’t receive sufficient resources to effectively attend school and graduate and (2) those in middle-cla families that are informed that they can achieve their goals through loans alone. This is divisive and enge ders middle-class resentment that is similar to the way many perceive “welfare recipients” as unwilling work and lazy. She suggests that one could contrast this to people's more positive perceptions of program: like Medicare and SS that benefit all senior citizens. Affordable universal public higher education shoule benefit the economy and also promote democracy. Con Staisloff (2016) suggests that if public college tuition becomes free, we would risk undervaluing a co- lege education. He argues that the question that should be asked is "Why does college cost so much tc begin with?” Rather than providing free tuition, colleges should invest in programs that result in greate” efficiencies at college and provide seed money for innovations such as competency-based education a open educational resources. Answering this could also lead to fewer degree programs, less research beinc conducted at nonresearch institutions, appropriately larger class sizes, and more efficient administrative services. ‘According to some experts, colleges may not be able or wiling to accept many additional students, so ‘this could mean that better ranked public colleges become more selective rather than increase their capacity One possibilty then could be that many poorer students who have attended high schools with fewer resources and fewer college preparatory programs could not attend the better ranked public colleges (Price 2016) Kelly supports Staisloff’s argument pointing out that California community colleges, known for thelr inexpensive community college fees, turned away 600,000 students during the recession when enrol- ments grew quickly, but the state budget for higher education declined (Kelly 2016). He points out that free tuition isn’t really free; itjust shifts costs from students to taxpayers. Tuition-free public colleges couls add to the strain on public budgets especially if colleges don’t improve their efficiency. Also he argues ‘that federal grants tend to cover tuition costs for average low-income students in community colleges. Ir spite of free tuition, only one-third of students from the bottom income quartile who started community college in 2003 finished with a degree or certification by 2009. Even only 42 percent of two-year students from the top income quartile finished community college. Kelly recommended the scarce federal mone) be targeted toward those who needed it the most and allow them to choose public or private college that is appropriate. ‘Thus, we see that a crucial issue is whether to target certain groups of students for benefits lke free tuition or provide them to all students. What do you think? Should there be free tuition in public universities for all students?