The Wall Street Journal recently reported that the rise in college costs and student-loan burdens is becoming a critical issue in the 2016 presidential race.
Since student debt surpassed one trillion dollars long ago, I’d be shocked if it wasn’t a campaign issue.
The cost of college has spiked 150 percent since 1995, compared with a 50 percent increase in the cost of other goods and services. In fact, if automobile prices had gone up as rapidly as tuition over the past 30 years “the average new car would cost more than $80,000,” wrote The New York Times in April.
Certainly the student-loan issue is a major concern for the Millennial voters who are affected by it. A Harvard University Institute of Politics poll found that 57 percent of people under 30 believe that student debt is a major problem for young people.
It’s also a huge catalyst in getting this generation to vote. According to The Washington Post, people 18 to 34 account for about one-fourth of the voting-age population. That’s a lot of voters. And if you recall, their votes proved pivotal in the last two presidential elections.
The average student is leaving college with $33,000 of debt. Still others are not even making it to college because they simply can’t afford it. And what about all of the students who drop out after a few semesters and are not able to return to college? Many of them have tens of thousands of dollars of debt and do not have a college degree to show for it.
Huge student debt has derailed dreams, evoked a sense of betrayal and led to devastating consequences. It’s holding many college graduates down from buying cars and homes because their debt-to-income ratio is just too high. Many can’t even start a family.
To remedy the situation, The WSJ article noted Republicans are advocating driving down tuition prices, while Democrats are keen on pumping more federal funds into public universities. It appears many of the presidential candidates have come up with their own plans whether it’s proposing debt-free college or income-share agreements (in which private investors would cover the cost of college in exchange for a percentage of the student’s future earnings).
In the meantime, I say we educate soon-to-be college students and their parents about the best strategies to fund a college education—long before they set foot on a campus.
The Give Something Back Foundation—which provides scholarships to low-income, high-achieving students—is engaging with university presidents, the college counseling community and financial literacy organizations to offer resources on how to best budget for college and navigate the complexities of financing higher education. We want to help these families avoid financial calamity by understanding the consequences of large, long-term debt and by encouraging them to consider reasonable options. We hope to help students become smart shoppers about their college choices and plot strategies that realistically fit their financial circumstances.
Regardless of the political debate, we need strong leaders who can help turn the tide in rising college tuition costs and become a true champion for young people. My guess is that whoever is elected as president in 2016 will have done so as a result of some real support from the Millennial generation.