As the nation emerges from the coronavirus lockdown and begins to return to a semblance of normalcy, many of our cherished institutions will face some harsh realities. Nowhere will this dose of reality be starker than for America’s colleges and universities.
While our public school system will go through some wrenching times as it comes back to life, K-12 parents and students will not face the prospect of crushing debt and soaring costs that have been inflicted on consumers of higher education. College students, in contrast, will return to campuses not only having missed most of a semester of classes; they will also struggle with exorbitantly high costs that will financially burden many of them for the rest of their lives.
How did we come to this sad turn of events, in which college degrees that should create a pathway to opportunity and prosperity instead present a long road of debt and possible financial ruin? Today, tuition and costs at some private colleges hovers in the range of $50,000 to $70,000 per year. College grads carry debt that can run from tens of thousands of dollars for undergraduate degrees to over $100,000 for post-graduate degrees. As they struggle to cover this debt, buying a home often becomes a distant dream. Even buying a new car often gives way to making the monthly college debt payment.
Total college student debt today exceeds $1.5 trillion. With the added burden of the current financial crisis, much of this debt is unsupportable. Student loan defaults on a large scale are likely unavoidable. And while the just-passed national financial rescue legislation provides some relief by postponing debt payment and interest for a time, the overall financial burden will remain.
Predictably, some in Washington are calling for forgiving much, if not all, college debt. But like the other emergency financial measures passed by Congress, such relief couldn’t go on indefinitely. Future college students will continue to face high costs and mountainous loans. The cycle of debt and default will continue to loom on the financial horizon.
The leaders of our higher education system have a moral obligation to break this vicious cycle. Just as the Federal Reserve system has taken extraordinary measures to shore up the nation’s finances, colleges and universities should also take emergency action to ease the financial burden on their students. College administrators shouldn’t cry hardship and shirk from this responsibility.
Nationwide, colleges are sitting on endowments of well over half a trillion dollars, according to the National Center for Education Statistics. They should seriously consider making these funds available to students to help pay down their current loans and reduce future tuition costs. If the Fed can tap into the national treasury for “quantitative easing” to lessen strains on our national economy, higher education treasuries can likewise tap into their great wealth to help ease their students’ money crisis.
And going forward, it’s long past time for colleges and universities to get real about not just containing, but lowering their stratospheric spending. Too many campuses have become islands of extravagance and excess amid a sea of hardship in their surrounding communities. In just one glaring example here in New York, a college president makes $5.1 million a year, 35 times what the school’s professors make, on average, and equal to the tuitions of 99 students, according to the Chronicle of Higher Education. Yet the community in which the school is located is one of New York’s poorest, with finances so precarious that it hovers near bankruptcy. In that town, as in so many others, the college is literally the shining, distant fortress on the hill with the surrounding town languishing below.
This college, and others like it, should take a hard look at themselves. Every expense should be examined, every bit of excess wrung out. The goal should be to reduce tuition and keep costs manageable over students’ academic careers.
In the future, public policy in Washington and Albany must be to stop rewarding higher education’s financial excesses and incentivize affordability instead. Federal and state aid should increase only for schools that bring their costs down. That means fewer top-heavy college administrators tripping over each other, more professors teaching more than only 10 or 12 hours a week, and fewer extravagant campus building sprees.
When students return to college this fall, they’ll return to a world changed by nature and hard times. If colleges want students to succeed, it’s time for them to lead.
Al D’Amato, a former U.S. senator from New York, is the founder of Park Strategies LLC, a public policy and business development firm. Comments about this column? ADAmato@liherald.com.