Student debt and its impact on the economy
Published April 8, 2014
by Burlington Times-News, April 7, 2014.
The student debt load has widened the “wealth gap,” and that’s bad news for more than just the people who graduate from college saddled with years or even decades of college loans. But it’s a problem we can fix, if the nation and its politicians are committed to strengthening our economic future.
Why is that a problem? The wealth gap isn’t just the broad chasm that separates the rich and poor, but the gap between the rich and everyone else. The U.S. economy was built on a strong middle class, but all signs point to a shrinking middle. If more household income is eaten up paying off tens of thousands of dollars in student loans, less is available to help support a consumer-driven economy.
As an Associated Press story noted, graduates who spend years paying off their loans are more likely to delay contributing to their own retirement funds. That could have heavy implications for the future, when these graduates reach retirement age but lack the income necessary to sustain them in their golden years.
North Carolina’s constitution stipulates that admission to state universities should be free, “as far as practicable.” Its writers understood that education is not an expense, but an investment that will pay dividends throughout a graduate’s working years. Over the years officials in Raleigh have taken that constitutional mandate as an unworkable suggestion.
Our state universities typically rank among the most affordable, but as middle-class incomes have stagnated, the reality is that each tuition increase prices more students out of a college education Not everyone can go to Harvard nor should they. But as a nation trying to compete in the global marketplace, it is in our best interest to help students who have the ability, desire and motivation to further their education do so without amassing a pile of debt.
That can be done many ways, including enhancing and expanding early-college programs that allow students to graduate with some college credit or the skills to get a job that offers long-term potential. Community colleges, especially in North Carolina, have a strong track record of placing graduates in the jobs available in their area, but they also offer an affordable option for university-bound students to get required courses out of the way.
Programs such as UNC-Chapel Hill’s “Carolina Covenant” help qualified low-income students graduate without debt, through a combination of scholarships, grants and work-study assignments. More options for middle-income families, who often fall through the cracks because they make too much for financial aid but cannot afford full tuition costs, is needed. In return, we must expect from them the best they have to give — good grades, strong work ethic and a desire to contribute through work-study or part-time jobs.
Allowing students to graduate with mountains of debt hurts our economy as well as the individuals who may take years or even decades to pay off their college expenses.
