Of the 1.8 million students projected to receive a bachelor’s degree as part of the class of 2018, more than two-thirds will be leaving college with more than just a diploma and a picture in their cap and gown.
Recently, the student debt crisis has been compared to the 2010 mortgage crisis, and for good reason. Student loan amounts have been increasing at an alarming rate. In 1994, only about 50% of college graduates had student loans, with the average amount around $10,000. Just 20 years later, over two-thirds of graduates are in debt for more than three-times that amount.
This increase is caused by how fast college costs have skyrocketed, while government grants and other support have failed to keep up, putting the burden of tuition costs on the students and their families.
In order to start paying back their loans, many students choose to take jobs outside of their field, work more than desired or have more than one job. They also delay life events like buying a house, getting married and having kids. Nevertheless, graduates are still struggling to pay back their loans on time.
Currently, the default rates on student loans is about 11%, reminiscent of the mortgage crisis whose default rates peaked at 11.5%.
For these reasons, many high school grads are seeking alternatives to a college education, choosing to enter the workforce without a higher education degree. What choice do they have if they can’t afford school and don’t want to be burdened for years to come? However, this only ends up limiting their potential and future prospects.
Ignoring outliers like Mark Zuckerberg and Steve Jobs, a college degree is typically needed to be promoted to leadership positions and to even be considered for high paying jobs. In addition, as AI and automation technologies continue to advance, many fear that jobs in manufacturing and service will disappear.
Now more than ever are career opportunity and success tied to a college degree.
How can we make higher education accessible to all?
1. Lower the cost.
There is no doubt that the cost of college is high. For the 2016-17 academic year, the average tuition for public schools was $24,600, while non-profit private school cost averaged $49,300, over a 50% increase from 1994. Since these amounts cover costs for new buildings, faculty and staff to support the expanding student body, lowering these numbers may be difficult. However, some states have found ways around this.
Places like California and Chicago have made community college free for local residents. This allows students to complete a number of classes for no cost before going on to earn a bachelor’s degree, resulting in less time spent at a four-year school and less student loans needed.
2. Share the burden.
Other ideas put more responsibility on the four-year universities themselves, suggesting that they help students complete their degrees faster, find ways to lessen their student debt and ensure they are fully equipped to land a job upon graduation.
Some schools have even adopted programs like the Income Share Agreement (ISA), in which the colleges share some of the responsibility for their students’ loans. Purdue University’s ISA stipulates that if the student can’t find a job after graduation, they won’t have to pay, and the more successful the student is, the more the college would earn back. This method incentivizes the university to prepare their students for life after college while removing some of their loan burden.
3. Make repayments doable.
It may be surprising to learn that the U.S. is not the only country with high average student debt. Students from both Sweden and Australia have an average of $20,000 in student loans upon graduation. For Sweden and other European countries, the difference is that their repayment period is decades longer, from 20 to 30 years compared to just 10 years in the U.S.
In Australia, monthly payments don’t begin until the borrower’s earnings reach $40,000 and payments amounts are automatically based on salary. Here, there are similar programs in which a borrower can apply for, called Income-driven Repayment (IDR). While it is not automatic like in Australia and has to be renewed yearly, it makes payments possible and gives graduates time to build their careers.
An affordable college degree is not as insurmountable as it may seem. With work and support for these policies and programs, we will eventually make it out of the student debt crisis.
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Ashleen Knutsen is a website content producer and news writer for the University of California’s Viterbi School of Engineering. After a decade of experience in engineering and research, she decided to pursue a career in science communications to not only spark women and girls’ interest in STEM, but to let them know that they too can change the world.