Education Reform: College
The Democrat primary debates are just over one month away and education is a key issue dividing the now 24-strong field of candidates. This week we're focusing on Education Reform: College.
A Lifeboat For Students Drowning In Debt
Should higher education be a basic public good? Yes, says Presidential hopeful, Elizabeth Warren, whose increasingly expansive set of policy proposals now includes a promise to cancel student loan debt for an estimated 42 million Americans. Warren’s plan, which would write off $50,000 in student debt for everyone with an income beneath $100,000, and make higher education free, would help relieve the $1.5 trillion student debt burden that she says is “crushing millions of families and acting as an anchor on our economy.” The proposal would be paid for by a new annual wealth-tax targeting so-called ‘ultra millionaires’ with over $50 million in assets. But is her plan really feasible?
In this episode, Today Explained turns to this central debate surrounding the Democrat primary: education reform.
It’s A Racket
Mitch Daniels, former Governor of Indiana and President of Purdue University since 2012, recently described higher education as a ‘racket’. It’s a product people feel they need to have, so colleges can effectively charge as much as they want for it, without ever losing customers. At the same time, the U.S. government and private lenders have made loans readily available. It is unsurprising then that as college attendance has increased, the annual cost of tuition has shot up with it, doubling from $15,000 per year to nearly $32,000 between 2000 - 2016. A profitable ‘racket’ indeed. But with student debt now the highest it’s ever been, this begs the question: is there another way?
In this episode, Mitch Daniels explains the spate of reforms he implemented at Purdue University that allowed him to freeze tuition fees and introduce additional, more affordable courses. There may be lessons here for all universities and for the 2020 candidates looking to reform the U.S. education system.
“If You Want To Amount To Anything, You Have To Go To College…”
Or do you? While some degrees are incredibly valuable, others are “functionally worthless” and may just saddle you with a debt your education will do little in helping you to pay off. Pick one of the top 20 majors, all of which have engineering, mathematics or economics in the title, and you can expect to earn in excess of $3.5 million over the course of your career, amounting to a 15-20% rate of return on your tuition fee costs. But choose a major in a subject at the other end of the scale, something ending in ‘studies’ or ‘education,’ and the rate of return on your tuition costs drops to around 3%.
So, should everyone go to college? In this episode, the Words & Numbers team suggests: perhaps not.