On April 16 of this year, Moody’s Investors Services published a report entitled “Wealth Concentration Will Widen for U.S. Universities.” This report was the subject of articles on the same day in such major media outlets as the Boston Globe, The Wall Street Journal and BloombergBusiness.
The underlying tone of the Moody’s report was fundamentally positive, as was true of the media reports referenced above. Given Moody’s previous grim reports regarding the perceived financial weakness of much of American higher education (see an earlier blog post in this series, Moody’s Blues, Feb. 14, 2013) a positive report on a few enormously wealthy AAA-rated institutions was presumably welcomed by many readers and investors.
As President Obama begins the final two years of his second term, and as the next Congress takes office with both houses controlled by the Republicans, what might we expect to see coming out of Washington that will change the landscape for higher education?
College Rating Plan
In August 2013, the Obama White House announced a plan to create a rating system for colleges and universities. In the face of considerable opposition from many higher education organizations and individual campuses regarding the wisdom of any such plan, and the criteria to be used for rating campuses, the timeline for its release has been repeatedly extended.
In the first of three parts of this series, I discussed the general topic of what has been called a “jobless recovery,” following the Great Recession of 2008. In parts two and three, I examined at length the culprits that have been implicated as being the cause of our weak economic recovery: an outmoded and, to date, unresponsive system of higher education; and income and wealth inequality.
Analyzing the root causes of this unusually poor economic recovery is important not merely to ensure that blame is correctly assigned. The real importance lies in our efforts to remedy the problem: If we are focused on the wrong cause, not only will our solution fail to revive the economy, but also the potential for harm in repairing something that wasn’t broken could be enormous – and, in the long run, further negatively impact the nation.
In my last post, I considered the claim that more and better education is the answer to fixing our troubled economy. However, as I pointed out in the first post to this series (Sept. 8), there is a second explanation to the uneven nature of America’s economic recovery from the Great Recession: the game may be rigged to favor the very rich at the expense of everyone else. If this explanation has merit, then trying to repair the economy through more and better education will eventually prove to be not just futile but potentially very destructive to long-established institutions of higher learning.
Last week, I provided an overview on a topic of vital importance: the highly uneven nature of America’s economic recovery since the Great Recession of 2008. Corporate America and its shareholders are doing very well – but the great majority of wage earners are not. What accounts for this unevenness? Noted Harvard economist Gregory Mankiw is quoted as saying, “The best way to address rising inequality is to focus on increasing educational attainment,” (The New York Times, “Income Inequality and the Ills Behind It,” July 30, 2014). Is this statement true? Or does the real answer lie elsewhere?
Almost every week for the past two years, I have been posting opinion pieces to this blog that relate to the current issues and challenges facing higher education nationally, and that provide details about the solutions we have been developing and implementing at Roger Williams University. I have tried to call things as I see them. Where I felt it fair and appropriate, I have not been shy about being critical of higher education in general, and the practices at some campuses in particular.
At the same time, I have endeavored to place the issues facing higher education in the broader context of 21st century America: not every problem that involves higher education can be fairly attributed to the actions of our colleges and universities, and not every problem that involves higher education can be solved by higher education, either as individual campuses or in the collective.
We’ve spent five weeks looking at the question that continues to be the focus of reports and articles in the media – “Is college worth it?” – from the standpoint of four distinct concerns: its perceived lack of affordability; the burden of debt that faces so many graduates; the relative scarcity of well-paying jobs for recent college graduates; and the risk that a student will borrow money, not complete his or her course of study, and be economically worse off than if he or she had never started. (As an aside, I should note that the question of the worth of a college education has been so frequently asked that it is now being satirized. The Onion recently posted the following headline on its website: “Study Finds College Still More Worthwhile Than Spending 4 Years Chained to Radiator.”)
In previous blog posts on this topic, we have explored concerns relating to how expensive a college education has become; how many students are graduating with considerable debt; and how difficult it is for some graduates to find good jobs – all preparatory to a final discussion on the underlying question: Is college worth it? Before we take that question on, however, we must review a fourth concern:
Not enough college students are graduating, leaving them in debt and without a degree.
This is the most serious and significant of the four topics we have been discussing.
To begin, there are many studies regarding the economic impact on individuals with college degrees in comparison to those with just a high school education.
In Part 1 of this series of blog posts, I said that the question of the worthiness of investing in a college education was best addressed by looking at four discrete concerns: high cost, high debt, scarce jobs, and low graduation rates. In Part 2, we looked at the first concern, that too many families were finding that a college education had become too expensive. In Part 3, we analyzed the student debt “bubble.” This week, we’ll examine the concern that too many college graduates can’t find well-paying jobs.
There are too many unemployed or underemployed college graduates who are not earning enough to pay back their debts.
In Part 1, I argued that the proper way of determining whether college was worth the investment was first to examine four distinct concerns—high cost, high debt, scarce jobs, and low graduation rates. Last week, in part 2, we looked at the first of these concerns: has college simply become too expensive for many families? This week, we’ll examine the second concern:
There is a student debt “bubble” that is preventing young college graduates from buying homes, starting families, and thereby acting as a drain on the entire economy.