Former college presidents blast alleged college debt 'myth'
- The former presidents argue that college debt is not the "disaster area" that journalists and politicians say it is.
Two former college presidents are fighting the “myth” of college debt and its alleged solution of free tuition, placing the blame on the student dropout rate instead.
Dr. William G. Bowen and Dr. Michael S. McPherson call the student debt crisis “overblown” and that increasing college tuition costs are a result of students failing to complete their degrees rather than unfair tuition practices.
Bowen, president emeritus of the Andrew W. Mellon Foundation, served as Princeton University’s president from 1972-1988. McPherson was the president of Macalester College for seven years and currently serves as the president of the Spencer Foundation.
In their co-written article on Vox, Bowen and McPherson place the blame on politicians, pundits, and journalists for creating a widely-hyped and “persistent panic” about a mounting debt crisis.
While both presidents acknowledge that current higher education has many faults, they agree it is hardly the “disaster area” that journalists and politicians purport it to be.
“Panic is rarely a desirable state of mind either for identifying or solving problems,” they wrote in their article.
Despite some inflammatory rhetoric to the contrary, Bowen and McPherson note that 40 percent of students have no debt when they graduate from public colleges. Even the majority of students who do take out six-figure loans do so to pay for graduate school or to earn degrees in high-earning fields, such as medicine or law. In contrast, for the 60 percent of students who do take out loans, the average amount after graduation is just $25,500.
In fact, a case study by the Treasury Department revealed that college dropouts are increasingly more likely to accrue large amounts of debt, both in college and out. These dropouts, many of whom have “little enthusiasm for repaying what they owe,” are three times as likely to default on loans as college graduates, resulting in skewed student debt numbers.
Bowen and McPherson assert that these college dropouts do not reflect the “average college student” on which journalists and politicians focus, nor does the average amount of debt that students accrue.
Perhaps most interestingly, Bowen and McPherson agree that free tuition does not solve the so-called “student debt crisis.” In fact, it does little to alleviate the financial pressure on low-income and middle-class students. Rather, these students will find that free tuition still does not cover the costs of living expenses, book fees, and other general costs.
By investing in their future, Bowen and McPherson contend, students will reap larger rewards in the end. On average, graduates in their 20s with a bachelor’s degree earn $20,000 more each year than high school graduates—a number that increases with time. By investing in a college education, even with some college debt, Bowen and McPherson assert that costs will balance themselves out after several years in the workforce.
Both professors dispute the claim that a majority of college students are out of work after graduation. They point to growing high school-to-college earning ratios and lower unemployment rates for degree-holding graduates as evidence. The unemployment rate for college graduates is twice as low as for high school graduates, 2.8 percent compared to 5.4 percent in 2015. People who hold master's degrees or higher have even lower unemployment rates.
They call it “foolish” to believe that immediate monetary relief will lower the debt crisis. Instead, Bowen and McPherson suggest several “practical” solutions to rising college debt.
First, they propose improving the student graduation rate. Students who drop out before receiving a degree are not only wasting money, they are also not receiving the return on investment that a graduate would. Dropouts with some college experience earn only about $2,000 more a year than a high school graduate, compared to $20,000 more from a college graduate. By reducing student “waste,” either by preventing dropouts or by decreasing the length that some students take to earn their degrees, colleges will see a decrease in student loan debt.
To lower tuition costs, Bowen and McPherson suggest that colleges balance their budget. A good place to start would be to cut or trim “low-ranking” Ph.D. programs. By prioritizing funds, ineffective degree programs would give way to effective, successful ones. This, in turn, attracts donors and outside investments that can keep costs low.
Bowen and McPherson also draw attention to the surplus of academic Ph.Ds. There are few jobs actually available in academia, and those who do have jobs are in “oversupply,” which “in many cases serves better the interests of prestige-seeking deans and faculty than of students.”
Bowen and McPherson stress needing to “tune out . . . all the false alarms” that circulate around higher education. By approaching the student debt crisis “with patience and intelligence,” they believe that students and colleges can be better prepared to deal with tuition costs and student loans.
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