Students need relief from debt crisis

by Kenneth Leonard

The end of summer is here and if you are reading this the odds are pretty good that you’re getting ready to begin another year of school at San Diego State, which is a good thing. Becoming more educated is always a good idea.

Unfortunately, while the pursuit of higher education has historically been a smart investment, the price of a formal education in 2013 is unreasonably high, especially when one considers what happens after graduation.

Whether you’re a continuing student or an incoming freshman, you may be aware of how the cost of tuition at SDSU has risen at a steady pace for a decade. In 2003 it only cost $2,482 per year, compared to $6,766 for basic tuition and fees in 2013.

If the cost of tuition had merely grown in accordance with overall inflation, I’d say we would have nothing to complain about. Generally speaking, goods and services get more expensive as the years go by, so some increases in the cost of an education are to be expected. Since 1985, the consumer price index (CPI), an economic indicator defined by the U.S. Bureau of Labor Statistics as “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services,” has risen 115 percent. Again, keeping this in mind, some increases in tuition should be expected.

However, when we compare the overall rate of inflation with the rate of inflation for college tuition in the U.S. it quickly becomes apparent that general inflation is not what’s driving up the cost of education. If it were, the rise in tuition costs would correlate to the rise in costs for other services, but this is not the case. Tuition costs in the U.S. have risen nearly 500 percent since 1985, at a rate far outpacing the CPI.

The reason for this meteoric rise is simple: Colleges have no incentive not to consistently and mercilessly raise costs.

So, prices have gone up. It should come as no surprise then that student debt is at an all-time high and 57 percent of all students are borrowing money from the federal government for the purpose of covering tuition, which is a higher percentage than ever before.

Senator Elizabeth Warren made a statement last July saying, “Our college students already see that the system is rigged against them. They watched Wall Street bankers get bailed out while their parents lost jobs and struggled to hang on to their homes. They see special subsidies for companies that ship jobs overseas and exploit tax loopholes, while the investments in their future and jobs at home disappear.” Senator Warren raises an interesting point. We live in a nation where corporations are essentially financially rewarded for exploitative and often illegal practices while students are penalized for chasing the American dream. Make no mistake; the availability of an affordable education is a cornerstone of the American dream. If we live in a culture where opportunity is a reality then the current economic climate surrounding higher education should be generating widespread outrage.

The average college graduate in 2013 was saddled with nearly $30,000 in debt and the national tab for student debt is currently more than $1 trillion, which is more than $300 billion more than all American credit card debt combined.

The federal government isn’t going to provide any solutions to this problem because it profits tremendously from the proliferation of federal student debt. It’s up to universities to figure out how to lower or at least stabilize the cost of higher education. The most obvious way for them to do so is to reduce administrative costs.

In 2010 the Goldwater Institute released the results of a study conducted between 1993 and 2007 revealing the bloated expansion of administrative staff at universities. According to the study, student enrollment rose 14.5 percent and the number of researchers and professors expanded 17.6 percent while the amount of full-time administrators per 100 students soared at a rate of more than 39 percent. Even worse, the rate of spending on administration per student has risen by more than 66 percent when adjusted for inflation. By comparison, spending on actual instruction had only increased by 39 percent as of 2010.

Obviously, reducing administrative bloat is only one part of a complex problem that must be solved from several angles. The bottom line is universities need to figure out ways to reduce costs by whatever means are available without compromising academic quality. It’s time to stop sending recent college graduates out into the workforce after stacking the deck against them financially.