High Costs’ Impact on Learners and Society

We all read about the incredible gift that relieved the 2019 graduates of Morehouse College of all their debt. This act of generosity surged like an electric shock through the higher education community and the general public. There was, however, a bitter irony in that generosity that came as an aftershock to many people. Consider the situation of former Morehouse students who had resigned from the college before graduating, not because they were failing, but because they couldn’t go deeper into debt. Now they have no degree and debt, whereas, had they known and stayed, they would have no debt and a degree.

While this sad irony does not undo the generosity or the impact of the gift, it does underscore the brutal dilemma that confronts graduates, as well as those who do not complete and, at the same time, carry debt with them as they leave college.

I believe that more affluent students should pay their fair share. However, it is wrong to ask middle-class and poorer students to mortgage their futures in return for a shot at a good job and economic security. That is a Faustian bargain for them. But it is also a bad deal for the greater society.

Here’s why. As we have with academic success and failure, historically we have considered the costs of higher education -- including financial aid grants, loans and debt -- as largely the responsibility of the individual. As I looked more closely at the situation, however, I realized that, in addition to crippling the student, the losses to the greater society are staggering. Here are three examples why this is the case.

• We lose the value-added talent and productive capacity of those who don’t graduate. Here’s a “back-of-the-matchbook” example. There are roughly six million jobs going unfilled because of lack of preparedness of the workforce. If we were able to qualify only three million people to do those jobs at a rate of $30,000/year, that alone would add $90 billion to the national economy annually before taxes! And this would largely be money that went directly back into the economy for goods and services. I am using this example simply to make a larger point. Others can refine and detail the value of success in training and education to the larger society. Having said that, I believe that educational success for the many is clearly the society’s, as well as the individual’s, friend.
• We pay indirectly for those who do graduate, but with debt. They delay investments in home and family as well as vastly reduced discretionary expenditures because of burdensome monthly debt payments. Bluntly, their launch into productive social and economic citizenship is stymied by the debt they have accumulated. And their frustration is society’s frustration as well.
• And, of course, the costs we all bear for those who are not successful educationally and economically in terms of food, health, childcare and other social support services would level off and decrease with increased educational and employment success.

Improving educational attainment for everyone, at a cost that they can afford, is good for them. It is, however, also good for American society. Indeed, the societal benefit goes hand in hand with the personal benefit of a successful higher education experience. The ROI on investing in higher education includes improved personal health, social engagement, civic involvement and economic growth driven by personal success stories multiplied millions of times. That’s something we should all celebrate and strive for.

With that in mind, there is much discussion about “free” college and other solutions to the debt crisis in American higher education. Here’s a way to skin that cat. What about an income tax deduction or credit for the annual cost of loan repayment on the first $125,000 of annual income? If we think having children and homeownership are worth deductions, wouldn’t it make sense to add the cost of the source of their parents’ economic viability to the deductions list as well?