Higher Education: What’s the Cost?

Higher education, as its comparative adjective suggests, was not intended to be accessible for everyone. Indeed, throughout United States history, colleges and universities were limited; they were not a predominant aspect in the lives of USA’s citizens, nor its society. Things have changed drastically, however. Since the latter half of the 20th century; the presence of higher education has grown exponentially in American society. The U.S. leads the world in both quantity and quality of higher education. The United States alone makes up 58 of the top 100 universities in the world. The USA takes up more than a quarter of the top 1000 universities and colleges, and has the largest quantity of them in the world.

As with all things of such magnitude, there is an incredible amount of money associated with universities in the United States. The combined average of tuition, living costs, and other necessities exceed $58,000 per year, per person. Though American citizens are eligible for deductions in many aspects, the combined total of more than 16 million undergraduates alone charge the population with a hefty price. Total Student loans as of this year have exceeded $1.5 trillion: that is $1,500,000,000 owed in debt by more than 45 million people. Studies often attribute this tremendous financial strain to one of the reasons why college enrollment has been dropping steadily since 2010, for six continuous years of around 1.5% each year.

So what has happened? Taking a look back, the tremendous growth in both cost and enrollment is perhaps more modern than you think.

The first signs of growth of American higher education appeared in the start of the 20th Century. The roaring ‘20s in the USA brought tremendous wealth and opportunities for the nation as a whole, as well for every individual household. College enrollment started to finally seem possible for the average citizen. Paired with the increase in jobs, especially the expansion in finance and industry, a degree or even shorter programs for specialized training was thought to be highly valuable for both employers and employees. The massive increase in white collar labor force, along with available money to invest in education institutions, sparked the initial rise of American higher education. The enrollment in colleges in 1920 was a little less than half a million.

The next wave of growth occurred alongside the post-World War II revitalization and the Great Society programs. In 1944, President Roosevelt passed the GI bill, also known as the Servicemen’s Readjustment Act. Thus allowing federal government to subsidize large amounts of the cost (50-80%) to attend college for WW2 veterans, and creating a common belief among U.S. citizens that is necessary to enroll in college. The Higher Education Act and similar plans during the mid-1960s greatly increased governmental support for higher education in the form of subsidies, scholarships, loans, and education institutions themselves. The enrollment in colleges in 1965 was 5 million.

The money involved in higher education from that time has increased astoundingly, and therefore brought higher education into the sphere of economics. The emergence of the first widely successful for-profit university— Phoenix University— in 1976 indicated that colleges and universities were now not limited by the control of states and the federal government, and were also an increasingly profitable business venture. Student loans, especially private ones, were nearly non-existent in the 1970s. However, in 1978, U.S. Congress passed a bill called the “Middle Income Student Assistance Act”, which suddenly rendered all students, regardless of background or income, eligible for student loans. This opened the floodgates to both private and public institutions, banks and profit-seekers alike. Suddenly, the amount of students that were technically able to afford college increased dramatically. Federal subsidies were no longer even close to being enough to support most students, and so banks and other private firms—with interest rates unregulated by the government— became the solution. Institutions, therefore, were also able to hike up their prices due to the large quantity of enrollment. Today, for-profit universities, backed by large corporations, compete in the market for the ever-increasing demand of higher education. A degree is now able to be commoditized like a house or a car. Costs for colleges in the USA have doubled since the mid-1980s; spending more than seven years to repay a debt for college is becoming an uncomfortable norm for some people, and an unbearable burden for others.

Perhaps it is now the time for people to ask: “is it really worth it?” Education is becoming increasingly more of a financial gamble to many people, and the odds are growing against the average citizen. How can we assure the quality of education in such an environment? Is the cost worth the benefit? Will this “education bubble,” that contains the hopes and dreams of young adults, burst?

– Andy Fan ’19

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