Pointing to $1.2tn in outstanding student debt, she declares a student debt bubble driven by ever-higher tuition fees. Never mind that college student enrolment climbed by 20 per cent between 2005 and 2010, accounting for a large share of the recent increase in student debt. Contrary to her assertion, college graduates are not facing “a lacklustre US labour market” nor are they saddled with “debts they could never repay.” The jobless rate for college graduates is 2.6 per cent and the loan default rate is 1.1 per cent.
What’s more, Ms Foroohar ignores the benefits a college degree confers on graduates. There is scarcely a better investment than a college education. More than 70 per cent of the 11.6m jobs added during the economic recovery have gone to workers with at least a bachelors degree. Some 40 per cent of students at public four-year universities graduate without any debt, and those who do borrow complete their degrees with an average of $25,500 debt. All told, the Federal Reserve Bank of New York has found that a bachelors degree yields $1m in additional earnings over a lifetime — even considering the cost of college itself and the opportunity costs of forgoing wages and other investments.
To claim that a majority of college graduates live with their parents is just wrong — the increase in young adults living with parents is driven by non-college graduates. Nor do college graduates have diminished prospects of home ownership. The opposite is true: college graduates, both those with debt and those without, are considerably more likely to own a home than non-college grads, starting just three years after completing a degree.
It’s certainly true that American higher education faces a variety of challenges, not the least of which is the sharp cuts in state funding in recent years that have shifted more of the cost of a college degree from a public university on to the shoulders of students. However, public universities remain the most affordable path to a quality college degree. Writing the system off as “a study in financial dysfunction” and citing several misleading statistics contributes nothing toward solving those challenges.
Dr Christine M Keller
Vice President of Research and Policy Analysis,
Association of Public and Land-grant Universities,
Washington, DC, US