Americans owe more than $1.6 trillion in student loans, making that the second-largest sector of consumer debt, behind mortgages.
While that warrants attention from Congress and has generated numerous policy recommendations, it also calls for an examination of the causes. Primary among them is the fact that from 1988 to 2015, tuition as a share of funding for public colleges rose from 24 percent to 46 percent.
In other words, state governments have been swapping the burden for educating the next generation from taxpayers to students. That trend was exacerbated following the Great Recession, when states typically reduced funding for public education. In Washington, according to Vox.com, the state provided 70 percent of the funding for public colleges in 1991; by 2013, that had dropped to 30 percent.
Washington has made strides since then, with the Legislature working to boost funding for state colleges and limit tuition increases. Lawmakers have bolstered financial aid packages and expanded the State Need Grant — rebranded as the Washington College Grant — while recognizing that funding for colleges is an investment in our state’s future. But recent and future students here and elsewhere still face financial burdens that were not felt by previous generations and often leave the American Dream out of reach.
All of this comes to mind as Rep. Jaime Herrera Beutler, R-Battle Ground, announces that she has co-sponsored a bill (H.R. 4193) to help college students understand the complexities of their loans. The legislation would require lenders to provide students with monthly statements about accrued interest, projected payments and the total lifetime cost of a loan. Currently, lenders are required to provide information only upon disbursement, prior to repayment and during repayment.
“We owe it to our students to increase transparency when they sign for a loan; the process should be simple and understandable, with the goal of setting up every young person for success,” Herrera Beutler wrote in a media release.
We agree. And that small-but-meaningful approach makes more sense than proposals to have the federal government pay off all outstanding student loans. While student loans can be burdensome, the fact is that those who borrowed money must bear the responsibility for paying off those loans — provided they were issued in good faith and with transparency from lenders.
But whether talking about an incremental approach to helping borrowers or sweeping forgiveness of such loans, a more comprehensive view of the issue is necessary. According to a column at Vox.com from David Goldstein, the average cost of in-state tuition and fees in 1981 was $909; now it is more than $10,000 a year. Once inflation is accounted for, the primary driver of that increase has been a decline in state funding.
Colleges once were viewed as crucial to the nation’s future, the incubators of future innovators and leaders. But a Pew Research poll released last week found that only half of Americans now have a positive view of colleges and universities. Among Republicans, only 33 percent see value in higher education.
Such beliefs are anathema to a system that helped turn the United States into the world’s economic and educational leader, and they are a harbinger of a future in which this nation loses that status.
Colleges, like all institutions, are imperfect. But it remains essential that state governments and the federal government provide robust investment in education and in our students.
