Why College Education Should Be Accessible and Affordable

Kyei Baffour

Comm 215: Essentials of College Writing

April 23, 2012

Sharon Grunst

There was a time when parents who could not afford to pay for college for their children just worked their way through it by paying in bits and pieces from their monthly paychecks, relied on gifts from other family members or simply took another job to make those dreams a reality. The current recessionary economic situation the country finds itself in has put added strain on college financing options for most people and the sooner steps are taken to fix these problems the better. I come to this conclusion because of my personal situation concerning this topic. My family currently has three college students; I, my wife and our son, and we are all relying on loans and some grants to fund our education. I think the American Recovery and Reinvestment Act, which includes heavy investments in education, passed by Congress and signed into law by the President is a very good step in the right direction. This Act provides over $30 billion in funds to help improve access to college and help lay the foundation for positive long-term achievements of the country’s educational goals. Now is the time for increased investments in education because the economy, reeling from the current recession, benefits as a whole. The availability of adequate and inexpensive funding for college education is critical for America’s future prosperity and reforming the process is a must. Firstly, the basic argument for increased investments in college education is that employment prospects for college graduates are higher than for non-college graduates. Additionally, such employment comes with higher salaries and benefits such as bonuses, health insurance and retirement plans, which in most cases do not come with some lesser paying jobs. The National Center for Education Statistics fast facts sheet shows that the median salary for a male, with a high school diploma or GED was $30,000 whiles a male bachelor’s degree holder’s salary was $50,000 for the year 2006. Females with a bachelor’s degree earned $41,000, whiles holders of a high school diploma or GED earned $24,000. People with a higher level of education tend to have, relatively, a better standard of living, are able to provide for their families, give back to their parents and help their siblings. Equally important also, is the fact that higher education provides the job options, opportunities and skills necessary to be successful in today’s demanding job market. Moreover, it also creates a sense of well-being, generated by a steady and well paying employment, allowing for effective contribution to community or society. Secondly, increased investments in education, particularly in these recessionary times, will help with job growth thereby providing some of the needed stimulus for the economy. A significant portion of the loans, given to students in financial aid, is what keeps most of these higher education institutions in business. These institutions in turn become a major source of business activity and employment by hiring more employees and increasing their purchases of services and supplies which will in turn lead to further job creation in their communities. Moreover, in the long-term, it will lead to an increase in the number of small business owners, who tend to be degree holders, thereby creating more private sector jobs. The importance of these institutions to their local communities cannot be overstated. According to a study, the State of Louisiana received $7 return on every $1 spent on the Southern University of New Orleans (Maloney, 2009); by generating $111.5 million on a budget of $16 million from the state budget during the 2009 fiscal year. In effect, the availability of adequate and less costly student loans for college, which funds a significant portion of the operations of these institutions, together with state budget allocations will help in the provision of jobs. Furthermore, increased spending on supplies and services by these institutions promotes the business activity, in their local communities, necessary in this economic downturn. Thirdly, having an educated and informed populace is central to any modern society. One way, if not the only way, to achieve that is through quality education, at the core of which is critical thinking and providing the necessary skills for today’s job market. The benefits are well known, numerous and include having responsible citizens who follow the laws, pay their taxes, participate in the political process and contribute effectively to and help better their communities. Consequently, the importance of education, in this case college education, cannot be overstated since it touches every aspect of our lives. Additionally, statistics have shown that children and grandchildren of college graduates are more likely to attend college. Apart from available, adequate and less costly financing for college making it possible for would-be dropouts to stay in school, some of our social vices will be reduced by keeping these young adults busy with and focused on educational activities rather than standing on street corners practicing prostitution or selling drugs. People with higher education have an awareness of and know the importance of healthy sexual, personal and eating practices. Consequently, these practices help society and the economy as a whole since funds to treat sicknesses derived from bad sexual and eating practices could be diverted to other areas whiles drugs and crime reduction will place less of a strain on law enforcement and budgets of local and state governments resulting in lower taxes. Furthermore it creates a solid foundation for adult and professional life for these young adult who, without education, will most likely end up depending on society for their livelihood rather than contributing to society. Finally, I think that with the economic trouble that this country finds itself in, and the fact that the value of people’s investments, 401K’s, 529B’s etc, has been reduced significantly has made funding education, for most families, simply unaffordable. The stock, job, housing and credit markets are all in freefall and have negatively impacted parents and guardian’s ability to access credit or even the equity from their real estate investments to make their children’s aspirations for college education a reality. Apart from most of them either being unemployed or have their hours being cutback because of the current economic problems the country is experiencing, the cost of college has almost doubled in the last two decades. Student loan providers are in the business for profit; therefore I think their perception of education financing falls in the realm of profit and loss. Students borrowed $19 billion dollars in private loans in 2008, with some of these lenders assessing interest rates as high as 15 %.( Collins, 2009). The White House estimates savings of as much as $94 billion over the next 10 years if all middlemen in the college funding process are eliminated and allow the Department of Education, which already has a system in place making loans to students, to take over the process completely (Collins, 2009). Reinvesting this huge savings in college funding will help increase funding and graduate levels. According to Student Lending Analytics, an organization that aids higher education institutions analyze financial aid programs, current median loans have a yearly interest rate of 11 %.( Morgenson, 2009). These very high rates make it virtually impossible, in the current economic downturn, for hurting families to get such loans. This, I think puts to bed the argument by some that any process that excludes the private loan lenders is harmful to business and job creation. Imagine interest rates on student loans doubling on July 1, 2012! That is the best we can do as a country for students; the future of this country. I do not think that putting profit ahead of the long term economic and job security of the country and its citizens, especially in the education sector, is the right thing to do. Additionally, job losses because of the recession, which is spreading across the country has made the problem worse, which is why I believe it is the right time for increased federal involvement to help build a workforce of qualified graduates to compete in today’s global workplace. This is an investment in America’s future and will provide both an immediate and long-term stimulus which the economy needs. Its also time for reform since the student loan funding process is a mess. The sheer complexity of acquiring funding at the college level has not helped, partly because student loan funding at that level is partly managed by the government directly, whiles the other part is managed by financial services firms such as Sallie Mae and other business entities such as banks and credit unions. Some schools accept the government programs whiles others accept the private programs. On the other hand, some will not accept either in which case extra private student loan alternatives become necessary. The current administration claims it is committed to ensuring America has the highest proportion of college graduates in the world by the year 2020. They are also encouraging everyone that regardless of educational path after high school, it is important to enroll in at least 1 year of higher education or job training to acquire the necessary skills for a 21st century economy and job market. The heavy educational investments provided by The American Recovery and Reinvestment Act is a good start; however to achieve these lofty goals it is important to increase access to higher education by restructuring and expanding college financial aid, make federal programs simple and more efficient, making private lenders, who it will practically be impossible to eliminate completely due to lobbying activities and political connections, simplify disclosures and advise borrowers that such loans cannot be erased through bankruptcy. If college education is paramount for the economic prosperity of this country, steps have to be taken to insulate it from those who will treat it in terms of a profit or loss. In these recessionary times when most people who were, or thought they were, financially secure just a few years ago are losing, or have lost, their investments, employment and homes it is important that government steps in to make sure that the provision of high-quality college education, which is critical to America’s economic future is not compromised by the current recession. The only way to do this is by making bold and necessary increased investments in college education, dramatically overhaul and reform access to college funding and create incentives for college education because both the economy and society benefits.

References

Collins, G. (2009, May 28). When Sallie met Barack. The New York Times. Retrieved from http:www.nytimes.com

Maloney, S. (2009, April 30). State of Louisiana gets $7 return on every $1 spent on SUNO. New Orleans City Business (LA), Retrieved April 22, 2012, from EBSCOhost database.

Morgenson, G. (2009, May 2). Students’ First Lesson: Beware Loans’ Fine Print. The New York Times. Retrieved from http:www.nytimes.com

Wickman, D. (2009, February 10). College funding shows GOP’s flawed thinking on stimulus. (NEWS).USA Today, p11A.

http://www.college.gov/wps/portal/college

http://www.nces.ed.gov/fastfacts/display.asp?id=77

http://en.wikipedia.org/wiki/Education_in_the_united_states#funding for college

http://www.whitehouse.gov/issues/educati