SIU in Edwardsville, Ill.
Updated: October 3, 2013 6:08AM
In his campaign to make college a better value, President Barack Obama is going to step on plenty of toes. But this is an effort that needs to succeed.
Student debt now tops $1 trillion — more than Americans’ total credit card balance — and more than $180 billion of that is in some type of default. Instead of moving ahead with their careers and forming families, many young people are struggling like modern indentured servants to make their student loan payments. Parents and even grandparents can be buried in debt. This is an issue that affects the entire economy.
On Aug. 22, Obama proposed a government rating system that would help students judge colleges’ affordability and possibly be used for allocating federal financial aid. His targets are schools — even some seen as quality institutions — that have high dropout rates and high student loan default rates. Too many students at these schools wind up deep in debt without a degree or an income big enough to pay off their debt.
But a one-size-rates-all grading system probably isn’t going to work. Institutions of higher education are adept at gaming the system to boost their rankings. Teachers already complain they are pressured to give undeserved passing grades to get institutional graduation rates up. Numbers are fudged to inflate the number of graduates with jobs in their fields. Private services such as Kiplinger already rank schools on value and affordability. We don’t need a federal rating system.
That said, Obama is right to shine a light on the problems in higher education. Increasingly, we have a knowledge economy that competes on a global basis, and all Americans have a stake in a well-educated work force. We won’t have that if students can’t afford a higher education. Obama is right when he says we can’t price the middle class — and people working to get into the middle class — out of college.
Around the nation, state legislatures — including Illinois’ — have been steadily cutting funding for higher education for years. That translates into sharply rising tuitions — and student debt. In the past five years, public four-year tuition has gone up 27 percent over inflation, according to a College Board survey. States need to stop looking at tuition as a way to balance their budgets and to recommit themselves to public postsecondary education.
Meanwhile, a whole industry of for-profit schools has sprung up, many of which persuade unqualified students to enroll. Many for-profit schools do a good job, but at others, students wind up with huge loans and no degree. Or they get a degree, but it’s worthless. Either way, they’re saddled with debt and little chance of a good job.
We also should lower the standard for discharging student loans through bankruptcy. We can’t allow people to duck their responsibilities by declaring bankruptcy just as they embark on their careers, but we shouldn’t allow people to be buried in debt they have no hope of repaying. If private lenders could not pass on mountains of IOUs to students with impunity, they would think twice about driving young people deep into debt. Some students aren’t ready for a four-year college, and luring them into a trap of debt they can never escape is a hard lesson.
Colleges and universities — already unsettled by a looming new world of online education — will resist change. And discouraging schools from recruiting unqualified students will raise a thorny political question of access.
But the current system leaves too many young people by the wayside. It must be fixed.