President Obama crisscrossed the country this week, talking to college students about the student loan debt problem and arguing for an extension of the 2007 student loan interest rate cuts. But he has sidestepped an important issue relevant to student loan debt: it has become painfully clear that interest rates alone are not the cause of student loan debt and will be the least of student loan debt increases unless our higher education funding situation improves.
It is both ironic and heartbreaking that the state of higher education today is under constant criticism for being too costly, at the same time that colleges and universities are faced with severe budget cuts that contribute to the problem of ever-increasing student loan burdens. An April 2012 report from public policy think tank Demos, called “The Great Cost Shift: How Higher Education Cuts Undermine the Future Middle Class” highlighted the problem and pointed out that
“The steady escalation in college prices has occurred alongside stagnant incomes for most American households. Median household income in the United States in 2010 was just 2.1 percent higher than in 1990. To bridge the gap between cost and financial aid, increasingly students are borrowing from federal loan programs and private sources like banks. The volume of outstanding student loan debt has grown by a factor of 4.5 since 1999.”
In short, budget cuts cause student loan debt and hurt society. The cuts undermine any effort to improve the quality of all levels of education in the United States. Students are paying more, it seems, for less, as states strip funding and colleges are forced to eviscerate their programs. The consequences of the budget cuts have been dramatic:
- Reductions in programs and courses offered by colleges across the nation hurt our economy. At the State University of New York at Geneseo, President Christopher C. Dahl was forced to respond to state budget cuts in 2010 by “deactivating” three whole majors: communicative disorders and sciences, computer science, and studio art. Dhal wrote that “the SUNY budget cuts pose dangerous risks with real and lasting consequences, not just for SUNY, but for the state’s economy. The close connection between a state’s higher education system and economic development seems lost on too many state decision-makers, yet evidence linking the two is abundant.” In February, Frank Blethen, the publisher of the Seattle Times, presided over a town hall meeting sponsored by the paper, at which a panel of college presidents in Washington discussed the severity of higher education funding cuts. Blethen said, “even as we disinvest in higher ed, jobs requiring a baccalaureate or associate degree are going unfilled because of the lack of qualified applicants, while jobs requiring only a high-school education are swamped with multiple applicants.”
- Students now must assume often crippling financial burdens. Across Washington state, colleges and universities are suffering from the effects of a 50% cut in state funding in the past four years. University of Washington President Michael Young said that “in inflation-adjusted dollars, it costs as much to educate a UW student today as it did 20 years ago, but the state now only picks up 30 percent of the cost.” Colleges must raise tuition to make up for the budget cuts, and this leads to higher rates of student loan borrowing. There is a direct connection between these cuts and recently skyrocketing amounts of student loan debt. In Missouri, a similar situation lead Missouri State University President Michael Nietzel to remark that “A cut in state support for higher education, on top of the cuts we’ve already sustained, could trigger draconian cutbacks at the universities or staggering tuition increases. We do not want to put that cost on the backs of families, who are already hurting.”
- Important research suffers from budget cuts. Universities are the leading innovators in often life-saving science research, including medical research on cures for deadly diseases and conditions. According to scientists who spoke at the 2011 American Association for the Advancement of Science meeting, the quality of research has been hurt by severe state and federal budget cuts. When program budgets are cut, universities can no longer attract the best faculty, and talented lower-income students cannot get the funding they need to become productive scientists.
This situation is not sustainable, neither in terms of individual student opportunity nor national development. We cannot improve education, create a trained workforce that will improve our economy, or sustain important elements of our society such as health and well being, if we do not commit more financial resources to our education system. SUNY Geneseo president Christopher Dahl characterized the situation in his state this way: “We’re facing an economic time bomb. Wasting more time — and cutting more budgets — will do irreparable harm to SUNY, our state and succeeding generations of New Yorkers in a knowledge-based economy.”
Dahl could have been speaking on behalf of the entire nation. If the United States wishes to compete globally, if we wish our citizenry to be educated and participant in the governance and maintenance of our democracy, we must invest in higher education, not privatize it or divest from it. Instead of thinking in terms of short-term band-aid solutions, we must refocus on long-term benefits and results. The alternative is the decline of our once-great higher education system, and the death of hope and opportunity for millions of students.