If anyone needed further evidence that the inflationary rise in tuition is out of control, the latest analysis by Richard Fry of the Pew Research Center on the income levels of those borrowing to pay for college should convince any reasonable person that something has to be done about the problem before it eats away at the very foundations of our nation’s economy:
Fully half of the students graduating in 2012 who came from high income families had borrowed to pay for part of their higher education, double the rate from 1993. Similarly, 62% of graduates from upper middle income families had borrowed money in 2012, up from only 34% two decades ago. Of course the rate of borrowing among lower middle income and lower income families was even higher, involving as many as three out of four graduates, but the increase among wealthier families meant that for the first time in American history a majority of ALL students from every income group graduating from college in 2012 had to borrow money to pay for an increasingly out of control rise in the price of higher education. What was a problem for just lower income families when Pell Grants were first created has now become a problem for all of America.
“for the first time in American history a majority of ALL students from every income group graduating from college in 2012 had to borrow money to pay for an increasingly out of control rise in the price of higher education.”
The current system of financing higher education has to be fundamentally changed to avoid having this country drown in what Joel and Eric Best, writing in The Wall Street Journal, called a new “federal toxic asset.” Studies by the New York Federal Reserve Bank show that only about 56% of borrowers are making payments. Among those under 30 who should be making payments about one third are delinquent. By comparison, at the height of the Great Recession, only about 10% of mortgages were classified as delinquent.
Unexpected write-offs of billions of unpaid student loans will confront Americans with the same kind of awful choices they faced when the housing market melted down. Either we will have to raise taxes to pay for a student loan bailout, or cut other spending, or significantly increase the national debt. The only way to begin to address this problem before it gets worse is to get college costs under control and make college tuition free, as detailed in our plan for federally funded National Promise Scholarships.
The problem of the high cost of a college education is now a problem for all Americans. While the share of debt due to student loans has tripled for members of the Millennial generation in just ten years, even Americans over the age of sixty have experienced a major rise in the share of their debt from such loans. Five percent of them have become student loan debtors, as they agree to co-sign for such loans to help younger members of their family get the education they need to be successful in today’s economy.
We have assembled an inter-generational, bi-partisan coalition to tackle this challenge. Only with the support of all Americans can we solve a problem as enormous as college affordability. Please join our campaign by signing our petition for free college tuition today. And be sure and tell anyone asking for your vote this fall that you expect them to do something to make higher education affordable for every American.