Watching a speech by President Obama this morning, he pointed out that student debt was approaching a trillion dollars. It also now exceeds credit card debt.
A recent review also showed that the average resources spent on a student education at a public university was $16,000 a year. (In the past I had been incorrectly estimating it at $20,000 a year in the UC system). This means that when students pay a $12,000 tuition, they are now already paying a full 3/4 of their education. Tuition and fees at UC are currently at $13,200. If the speculated future tuition rises occur, in a short time, students will be paying in full for their education. This will strain Universities in then have to justify all of their costs above the resources spent on education.
President Obama also revealed that when he and Michelle finished their educations, they had a total student loan debt of $120,000. In aiding present students to continue their educations, student loans have been modified to not have to go through banks with their profits, in allowing consolidation at lower interest rates, and in limiting the payback to 10% of current income. Rather than punishing students for their borrowing, this is a realization that society has decided to shift the costs of higher education from the society that will benefit from the educated students, to the backs of the students themselves. While students whose families make under $80,000 have their tuition paid as a state support, there is an extra burden on upper middle class families and their children who have to go to loans to complete their education.
President Obama emphasized how the debt burden can cause graduates to put off marriage, buying a house, having children, and saving for their own children’s education.
A Pew Research Center study in May, 2011, http://www.pewsocialtrends.org/2011/05/15/is-college-worth-it/2/
showed that a college education is worth $20,000 a year more in earnings. It also contains much more data on public attitudes to the financing of higher education.
A new article in the L. A. Times shows that nationwide, the average tuition and fees at a four year public university are $8,244. At doctorate granting institutions the national average is $9,185. This puts UC at $4,000 a year higher than the national average.
