Let's Stop Kicking the Can

Because I am a believer in postsecondary education as a gateway to life, liberty and the pursuit of happiness, I am pleased to see a fair amount of energy among Democratic candidates for president going into proposals meant to address the high price of college.

I am convinced we have to do something, because we have reneged on the American bargain of work hard, get an education and prosper. For the first time ever, unemployment for recent college graduates is higher than the overall unemployment rate.

Additionally, recent research shows 41 percent of recent graduates are “underemployed” in jobs that don’t require a degree. These conditions are further reflected in some interesting data about what’s happening with wages. As reported by Alexandre Tanzi and Katia Dmitrieva at Bloomberg, since 2015, the real income of all college degree holders has been declining. Lower-earning college degree holders have seen their real incomes erode since 1990.

Gross historical averages may still indicate that college is “worth it,” but millions of college graduates are facing lives that have actually been ruined by the pursuit of a degree. In researching a forthcoming book on burnout, Anne Helen Petersen has been collecting narratives of millennial graduates who “feel stupid and ashamed that they took out as much money as they did, or pissed that so many forces in their lives -- parents, guidance counselors, professors, culture, peers -- assured them that it would all work out, if they could just get that degree.”

As Petersen says, to understand burnout, “you can’t just understand the amount of student loans we’re carrying; you have to understand what they feel like.”

“It’s hard to convey just how difficult and devastating it is to pay down a broken dream every single month for the rest of your life.”

The facile response is to insist that these people should have somehow chosen differently, a response which ignores that not having any postsecondary education is an even worse position from which to try to build a stable life. It also ignores the exponentially rising cost of college to students during the period we’re talking about. The average debt load for college graduates has more than doubled since 2003. What exactly were those people who matriculated to college in the last 15 years supposed to do to spare themselves from this fate?

If we are going to preach an education gospel, at the very least there should be some reward for heeding the sermon. We’ve reneged on the deal. Steps must be taken to renew that commitment.

The most important steps are far beyond the capacity of postsecondary education institutions to change. We are talking about generations of systemic problems that have resulted in record economic inequality. This is not something easily or painlessly reversed.

Last week I argued for the need to reset how we view the financing and operation of our public postsecondary education institutions. The current system, which requires institutions to compete with each other for tuition dollars in order to maintain operations, has resulted in waste and inefficiency, which crowds out lower-income students from even accessing college, while also increasing costs on middle-class households. It also directs resources away from what I believe should be the core of the public institution mission -- teaching and learning.

All the targets of those who are critical of the operations of colleges -- luxe student amenities, bloated administrations, steadily rising tuition -- are a consequence of the current system of competition.[1] To help institutions more closely follow their values, we need to create an incentive system that reflects those values we’d like them to live by. Presently, it’s all out of whack and has been for a long time. Chasing tuition dollars is not consistent with the purported mission.

Michael Bloomberg’s recently released proposal seems targeted to address some of these factors that have led to this breaking of the bargain implied by the education gospel. Among other things, he wants to make college free for families earning less than $30,000 a year, to forgive debt for those who went to predatory for-profit institutions, to make income-based repayment less burdensome and to double the size of Pell Grants.

I have little doubt that adopting these proposals would ease some of the burden that the current and most recent generations of students face. More aid is more aid.

Unfortunately, while Bloomberg’s proposal may make the price of college more affordable for more students, it does nothing to change the current system’s issues with the cost of delivery. Adding more money to the system in this way is more likely to exacerbate divides than it is to close them. Elite institutions will figure out how to get their hands on as much revenue as possible, while others will exist on whatever leftovers trickle down.

Unlike the Warren and Sanders plans, it will be expensive without finding efficiencies or changing the structures and incentives. It is merely feeding the beast. Progressives should reject it because it isn’t progressive. Conservatives should reject it because it’s expensive and inefficient.

My support of free college proposals is rooted in my values and my belief that it will result in the most efficient and cost-effective system. This is not a crazy notion. A recent study published in The Lancet found that a Medicare for All system would save $450 billion per year in annual health-care expenditures while saving an additional 68,000 lives.

This calculation takes into account all health care spending, including all the premiums, deductibles, co-pays and everything else that individuals currently pay into the system, rather than simply looking at government expenditures. The study is a pretty clear illustration of a system that is unsustainable and unduly burdensome on those who are least able to manage those burdens. This results in additional costs on every American. Our system for financing postsecondary education embraces the same flavor of dysfunction. The wealthy can buy their way around the burdens, while the less well-heeled are given subsidies that leave them in precarious states. We cannot just keep putting Band-Aids over sucking chest wounds.

Of course changing to a Medicare for All system would be disruptive to the status quo. It would fundamentally alter, even eliminate, the insurance industry. Hospitals and doctors would see significant change. Some would be relative winners and some would be relative losers, but the end result would be increased equality and an aggregate savings of money.

The choice is similar for public higher ed. Either we reset the system so it once again serves the public, or we continue down the road of postsecondary education as a private good without addressing these underlying problems. There is no doubt this would be disruptive to the current status quo and some institutions would be negatively impacted, but it’s my view that disrupting the status quo is a necessity, and the longer we wait, the more painful the ultimate price will become.

Bloomberg’s proposal, for all its political palatability, is nothing but kicking the can down the road.

At what point are we going to finally deal with the roots of the thing?