nkizer
Apr 23, 2015
Research Papers / Paying for the American Dream. - An English 102 Research paper that needs review - [NEW]
Hello,
Please evaluate my Research paper for an ENG 102 class. Your help and interest is greatly appreciated. I'm including my 3 areas of weakness that I know exist and might need help with.
Thank you very much.
Nichole
COUNTER-POINTS
Intuitively I feel that my essay could offer more counter points. I feel that this has been a hard area for me to add into the essay as I have never written a research paper before. I'm not sure if I need to sprinkle them in or block out certain paragraphs specifically for counter points. I'm sure that all depends on the style of paper but remain a little cloudy on how to do this within my paper.
INTRODUCTION APPEAL
I'm also not feeling very confident in my introduction and am not sure I'm effectively establishing common ground enough with the audience. I might be rattling statistics too much and not using enough pathos appeal.
PROOF-READING
Overall, proofreading and proper formatting is something that I have always struggled with in English. Especially commas for some odd reason. I know that I need to pay special attention when making my final draft to be diligient in citing, commas, other proper sentencing.
Paying for the American Dream.
American graduates are starting adult life with enormous debt unknown to previous generations. Currently, the average student debt is upwards of $33,000, with no data suggesting any slowing (Censky). Student debt has also surpassed all credit card debt at 1 trillion dollars (citation). Indeed, tuition costs are growing faster than household incomes. All of these statistics undoubtedly illustrate that the cost of higher education is creating a financial burden that Americans cannot sustain. Americans must reform how higher education is financed before a new era of economic and social despair further declines quality of life.
In spite of the staggering statistics, higher education wasn't always a machine that generated debt and uncertainty. Higher education has been an integral part of the American Dream. After WWII, education became a federal priority. Student loans were introduced through the National Defense Education Act in 1958 to expand college accessibility. This initially was an attempt so the United States could better compete against the Soviet Union during the cold war. This legislation was key in providing opportunities to thousands of people who could then enroll into universities to study engineering and sciences (Johnson). The National Defense Education Act was so successful that by 1965, the Higher Education Act made it possible for more Americans, (including women and minorities) to have access to college education. This act was significant in breaking barriers for middle-class students whose incomes didn't allow for scholarships but also didn't allow them to afford the costs of college (Johnson). More opportunities meant more Americans had a chance to improve their quality of life. The American ideals insisted that hard work would bring financial success.
Unfortunately, the economics of the United States has changed a lot since the mid 1960's. Over the last thirty years, college costs have soared, while the average American income has remained stagnant. According to The Center for American Progress, college costs have risen 1,000 percent since 1980. (Johnson). To put this in perspective, average household income should therefore be $77,000, not the $33,000 it is today (Censky). Public estimates reveal the same astonishing data that to obtain a middle-class lifestyle, a family of four needs to make $68,274 annually (citation). These statistics propose a very dichotomy between college costs and income. In fact, "The majority of Americans now believe that the middle class has less opportunity to get ahead than in previous decades (. . .) less job and financial security (. . .) and less expendable income after covering basic expenses. Hard work is not enough to keep up. (Rapoport et al). Unfortunately, these types of statistics are all too often becoming the prominent outlook on American life. The data raises concerns as to what kind of life Americans are making for themselves and if higher education really lends itself to opportunities in this economy.
The exponential increase of student loan debt has been evident over the last thirty years, but the recent economic downturn pushed the crisis to a new dangerous level. The Great Recession exacerbated the student debt crisis by scaring policymakers. In reaction to the failing economy, state governments quickly implemented deep education budget cuts that set off a chain reaction of unfortunate consequences for the student. For instance, tuition increased 27 percent at public universities to make up for lost revenue. At the same time, median income actually shrank (Johnson). Separately, the Great Recession also affected families as unemployment rates increased and wages were cut. The result was more emotional and financial stress on families to try to maintain their financial stability (Austin 332-333). Consequently, student loans skyrocketed as many families were unable to cover basic expenses, let alone afford higher education.
Although the great recession is driving much of the adversity in obtaining a higher education, certain behaviors by the financial and educational institutions are specifically to blame. In particular, aggressive lending tactics by private, public, and for-profit schools, in congruence with financial institutions, are manifesting excessive debt. This is happening by irresponsibly lending and misleading students. Richard Cordray, director of the Consumer Financial Protection Bureau, has called these tactics "strikingly similar" to those of the mortgage industry when subprime loans skyrocketed (Johnson). This is a scary proposition as the mortgage crisis lead America to a huge economic recession. For example, "Universities like N.Y.U. enrolled students without asking many questions about whether they could afford a $50,000 annual tuition bill. Then the colleges introduced the students to lenders who underwrote big loans without any idea of what the students might earn someday -just like the mortgage lenders who didn't ask borrowers to verify their incomes (Lieber). Just like there are many opinions for who is to blame for the mortgage crisis, so too remains the same for the student debt crisis. What is known is that there is definitely a lack of responsibility. Some would argue that irresponsibly lending should lie directly on the student.
Despite irresponsible lending tactics by both institutions, the individual student is ultimately responsible for their own decisions concerning their lives. However, if they are not provided the necessary information they need in order to make good decision, it quickly becomes very easy to make a bad one. University admissions are not fully transparent with enrolling students. In an effort to maximize enrollment, colleges will often misadvise in order to keep enrollment numbers up. Joan H. Crissman, interim president and chief executive of the National Association of Student Financial Aid Administrators states that "Aid administrators want to keep their jobs. If the administration finds out that you're encouraging students to go to a cheaper school just because you don't think they can handle the debt load, I don't think that's going to mesh very well." (Lieber). Unfortunately, that is the reality of the situation. Not all information is provided to students and according to Michael Martin of Tell Me More an NPR broadcast, "What resources are available to people who are 16, 17, 18 years old making these enormous decisions with a lot of money on the line? You know, are guidance counselors there, or are they totally overworked (Martin)?" This is an interesting question to ask. There is disconnect between social responsibility and the financial bottom line that effects the outlook on American lives.
Financial bottom line has taken priority over education. Tuition has increased in order to make up for lost revenue from state budget cuts. For instance, in Arizona and California, tuition rates are up 70 percent at four-year colleges (Oliff et al). That is a dramatic increase that no doubt puts financial stress on many families and students. It seems as though the state governments have chosen not to make education a priority as the budget cuts are heavily focused in education. Perhaps state policy makers should make a better balance of where they are making these cuts. Policy makers "rely too heavily on educational budget cuts" to remedy lack of revenue (Oliff et al). This knee jerk reaction to the economic downturn has now limited opportunities for individuals trying to make a good life for themselves with the skyrocketing tuition.
Despite the tuition increase, the state budget cuts continue to affect the individual student. Quality of education has declined for students as colleges have cut staff and eliminated programs. Specifically in Arizona, the university system "cut more than 2,100 positions; merged, consolidated or eliminated 182 colleges (. . .) and closed eight extension campuses" (Oliff et al). What does this mean for the individual student? Consequently, students have a narrower scope of educational options and often suffer academically because of increasing class sizes. Research by James Monks and Robert Schmidt of the University of Richmond suggests that these large class sizes can stretch faculty beyond their abilities to teach effectively thus, degrading the quality of education for the student (Oliff et al). Deep state budget cuts are obviously setting off chain reactions that are detrimental to American invested future.
Accordingly, the lack of expendable income from families and students paying for college is affecting their purchasing power. Assets are declining as more life decisions, like marriage and buying a house, are delayed. A survey of Consumer Finances found that "In the 2007 (. . .), 19 percent of working-age households reported having no assets or negative wealth. By 2010 that figure had risen to 33 percent, (. . . ) " (Rapoport et al). Excessive debt can really restrict a lot of buying options for individuals and families alike. The consequences of this have a great effect on the economy but also an individual's personal life. As result of financial stress, student loan debtors experience high levels of personal depression, family dysfunction, adverse health effects, and delay major purchases (Austin). In fact, higher student debt results in lower homeownership rates (Oliff et al). Often, individuals are using all expendable income to pay off educational debt, therefore, major life decisions have been limited including purchasing a house and perhaps starting a family.
In the same way higher education debt is taking control over buying power, it is also digging into reserves. Americans are now stretched so thin financially that savings has declined noticeably over the years. In 1980, household savings was at 10 percent. By 2006, household savings rate declined to 1 percent (Dwyer et al). This is a drastic drop that doesn't suggest American households are any better off than thirty years ago, perhaps worse. Typically, financial planners suggest 6 months of emergency savings yet three-quarters of Americans do not have sufficient emergency funds (Rapoport et al). It is increasingly harder and harder to exist within the world and anticipate costs that won't break the bank. To illustrate, "About one in three American adults say that if they lost their job they would not be able to pay their housing (mortgage or rent payment) for even a month. About one in four Americans say they have no emergency savings at all and would have to borrow from family and friends if faced with an emergency car repair, medical bill, or job loss" (Rapoport et al). It seems that most educated people are not much better off than someone else who didn't go to college.
If the decline of assets and savings wasn't unfortunate enough, many loans are now co-signed by a parent, which widens the reach of the crisis. Family members are now co-signing on loans to help afford higher education for their children. "In 2008 the number of private student loans with a co-signer was 67 percent, but by 2011 that share jumped to 90 percent" (Johnson). Families are now committing further and further to the shackles of debt with less flexibility of getting out of it. Parents typically want what's best for their children and make sacrifices accordingly. Parents in Arizona alone have seen a 77 percent increase in college costs (Sanchez). The American ideal that hard work and education will bring economic success is questionable.
Having a co-signer or not, large college costs still leads to distress. The cost of higher education threatens college attendance, which has adverse affects on positioning well for a comfortable life. It's not much of a surprise that rapid increases in tuition will most likely lead students to work a significant amount of hours to pay for their education while in school. Working extra hours consequently places students at a high risk of dropping out. According to a 2003 study from the U.S. Government Accountability Office, students who work more than 20 hours a week are less likely to complete their degree (Oliff et al). The potential financial stress of financing higher education could also change the landscape of graduates in America. With astronomical college costs, the United States might very well produce more associate than bachelor degrees. According to the Department of Education, over the last decade, enrollment of middle-income students in four-year colleges has declined as enrollment in two-year colleges is on the rise (Censky). This is unfortunate and illustrates how out of touch with reality college costs have become. Many good intentioned students can just not take on the financial demands leaving them stranded in a certain socioeconomic status.
It is no doubt difficult to find ways to afford college and it reaches beyond the expected 20 years. Unfortunately, paying off loans extends into the later years of life, resulting in less financial freedom. In fact, college students today will most likely be paying back their own student loans when their kids are attending college (Censky). This is a scary reality. If the financial policies for higher education remain unchanged, there will not be much opportunity in life beyond the indentured servitude of paying back debt. Approximately 10 percent, or $100billion of the estimated $1 trillion in higher education debt is reserved to those parents helping pay for their children's college (Censky). This is a stark wakeup call that higher education costs are really eliminating opportunity of financial freedom for the future. At some point, is the price of education worth the servitude it takes to pay it back?
The lack of assets, savings, and opportunities is unfortunate but perhaps what's more disheartening for Americans is whether or not the price of education is worth the costs. American ideals and the reality of financial stability do not coincide. In fact, 91 percent of Americans believe that financial success is derived from hard work and a college education. This hard work lends itself to economic opportunities that eventually lead to economic success. (Rapoport et al). That ideal is becoming more and more a fallacy today as higher education costs prevent any sort of financial independence. Everyday real world experiences rival American Dream ideals.
Despite the differences, higher education continues to be the forefront of mobility. Return on investment does happen just perhaps only for a select few. It is arguable that getting a college degree is a necessity to achieve middle-class status. Research shows that a college graduate makes $12,000 more a year, has lower unemployment rates, and generates over $1 million more in income over their life than someone who did not go to college (Oliff et al). What's important to ask is whether or not that extra income is expendable or dedicated to paying off college debts (children's included. The numbers do not necessarily illustrate the fatigue and grief of paying back debt. Investing in higher education can be a gamble that doesn't necessarily yield desirable results. "We now have a pay-to-play, winner-take-all game where the wealthiest are assured a spot, and the rest are compelled to take a gamble on huge debts, with no guarantee of a payoff" (Stiglitz). More and more, the idea of investing in education within this economy has shown its risks.
All investment risk aside, the statistics do reveal an increase in income. Although statistically, salaries increase with a college degree, it is not enough to maintain a comfortable standard of living in today's world. "Many American jobs do not pay enough to cover basic living expenses, (. . .) (Rapoport et al). Even with hard work, determination and a college degree, financial stability is not guaranteed like it was many decades ago. A recent analysis reveals that 62 percent of middle class Americans had to reduce spending because money wasn't expendable ("The Lost Decade"). This evidence raises concern about the effectiveness of higher education in the American economy.
Trying to fix the student loan debt crisis in hopes of a better life for future Americans is a very daunting and ambiguous task. However, tackling the issues step by step might help lead us out of this increasingly dangerous bubble. For starters, Universities need to offer more student support so that students can make better-informed decisions with financial aid. Financial aid forms are notorious amongst students and counselors alike for their complexity and confusion. According to an interview by NPR's Morning Edition, "that thing can be so confusing it leaves you having more questions than answers (. . .) if there's a way to simplify that letter, that could go a long way to helping people" (Martin). Simplifying a financial aid letter, although small, might be a very valuable step in the right direction if we want young adults to make the best decisions for themselves. Senator Tom Harkin, an advocate against for-profit schools remarks that "Community colleges and our public institutions, [are] not in the business of making a profit...they should be putting more into student support services and education" (Harkin). Overall, if there is a shift in more informational support from the Universities, it might curtail some students from making poor decisions.
In addition to offering more student support, small changes in the way financial institutions collect on student loan debt could be helpful. Educational loans should follow how other loans are forgiven. Currently, educational loans are virtually impossible to write off in bankruptcy court (Stiglitz). It might be in the best interest of the economy if some of the forgiveness on these loans were more flexible and catered to individual situations. For example,
"Australia has designed a system of publicly provided income-contingent loans that all students must take out. Repayments vary according to individual income after graduation. This aligns the incentives of the providers of education and the receivers. Both have an incentive to see that students do well. It means that if an unfortunate event happens, like an illness or an accident, the loan obligation is automatically reduced. It means that the burden of the debt is always commensurate with an individual's ability to repay. The repayments are collected through the tax system, minimizing the administrative costs" (Johnson).
It is no secret that the costs of higher education are changing the American landscape. The statistical data inevitably illustrates an economic crisis that has significant repercussions on the American lifestyle. Soaring higher education costs are at odds with American ideals, limiting prosperity and leading many to financial slavery. To reverse the trends of this crisis, attention will need to be directed to the effects rather than the causes. Forward thought might evoke awareness amongst policy makers to bring effective solutions that will correct this broken system. If education can once again be a priority in this nation, there is no doubt we will begin to find a solution to this problem.
Works Cited
Austin, Daniel A. "The Indentured Generation: Bankruptcy and Student Loan Debt." Social Science Research Network 53.2 (2013): 329-420. Social Science Research Network. 23 July 2013. Web. 29 Mar. 2015.
Censky, Annalyn. "Surging College Costs Price out Middle Class." CNN Money (2011): n. pag. 13 June 2011. Web. 28 Mar. 2015.
Dwyer, Rachel E., Laura Mccloud, and Randy Hodson. "Debt and Graduation from American Universities." Social Forces 90.4 (2012): 1133-155. Web. 28 Mar. 2015.
Harkin, Tom, and Linda Wertheimer. "Senator Warns Of A Student Loan Bubble." Morning Edition. NPR News. 27 Mar. 2014. Radio. Transcript.
Izzo, Phil. "Congratulations to Class of 2014, Most Indebted Ever." The Wall Street Journal. N.p., 16 May 2014. Web. 1 Apr. 2015.
Johnson, Anne, Tobin Van Ostern, and Abraham White. Editorial. The Student Debt Crisis. Center for American Progress, 25 Oct. 2012. Web. 25 Mar. 2015.
Lieber, Ron. "Placing the Blame as Students Are Buried in Debt." The New York Times, 29 May 2010. Web. 29 Mar. 2015.
Martin, Michael. "Tough Lessons On Debt For College Students." Tell Me More. NPR News. 02 May 2014. Radio. Transcript.
Oliff, Phil, Vincent Palacios, Ingrid Johnson, and Michael Leachman. "Recent Deep State Higher Education Cuts May Harm Students and the Economy for Years to Come." (n.d.): n. pag. Web. 23 Mar. 2015.
Rapoport, Miles, and Jennifer Wheary. "RUNNING IN PLACE: WHERE THE MIDDLE CLASS AND THE POOR MEET." (2013): n. pag. Web. 2 Apr. 2015.
Stiglitz, Joseph E. "Student Debt and the Crushing of the American Dream." The New York Times. N.p., 12 May 2013. Web.
"The Lost Decade of the Middle Class." Pew Research Centers Social Demographic Trends Project RSS. N.p., 22 Aug. 2012. Web. 30 Mar. 2015.
Hello,
Please evaluate my Research paper for an ENG 102 class. Your help and interest is greatly appreciated. I'm including my 3 areas of weakness that I know exist and might need help with.
Thank you very much.
Nichole
COUNTER-POINTS
Intuitively I feel that my essay could offer more counter points. I feel that this has been a hard area for me to add into the essay as I have never written a research paper before. I'm not sure if I need to sprinkle them in or block out certain paragraphs specifically for counter points. I'm sure that all depends on the style of paper but remain a little cloudy on how to do this within my paper.
INTRODUCTION APPEAL
I'm also not feeling very confident in my introduction and am not sure I'm effectively establishing common ground enough with the audience. I might be rattling statistics too much and not using enough pathos appeal.
PROOF-READING
Overall, proofreading and proper formatting is something that I have always struggled with in English. Especially commas for some odd reason. I know that I need to pay special attention when making my final draft to be diligient in citing, commas, other proper sentencing.
Paying for the American Dream.
American graduates are starting adult life with enormous debt unknown to previous generations. Currently, the average student debt is upwards of $33,000, with no data suggesting any slowing (Censky). Student debt has also surpassed all credit card debt at 1 trillion dollars (citation). Indeed, tuition costs are growing faster than household incomes. All of these statistics undoubtedly illustrate that the cost of higher education is creating a financial burden that Americans cannot sustain. Americans must reform how higher education is financed before a new era of economic and social despair further declines quality of life.
In spite of the staggering statistics, higher education wasn't always a machine that generated debt and uncertainty. Higher education has been an integral part of the American Dream. After WWII, education became a federal priority. Student loans were introduced through the National Defense Education Act in 1958 to expand college accessibility. This initially was an attempt so the United States could better compete against the Soviet Union during the cold war. This legislation was key in providing opportunities to thousands of people who could then enroll into universities to study engineering and sciences (Johnson). The National Defense Education Act was so successful that by 1965, the Higher Education Act made it possible for more Americans, (including women and minorities) to have access to college education. This act was significant in breaking barriers for middle-class students whose incomes didn't allow for scholarships but also didn't allow them to afford the costs of college (Johnson). More opportunities meant more Americans had a chance to improve their quality of life. The American ideals insisted that hard work would bring financial success.
Unfortunately, the economics of the United States has changed a lot since the mid 1960's. Over the last thirty years, college costs have soared, while the average American income has remained stagnant. According to The Center for American Progress, college costs have risen 1,000 percent since 1980. (Johnson). To put this in perspective, average household income should therefore be $77,000, not the $33,000 it is today (Censky). Public estimates reveal the same astonishing data that to obtain a middle-class lifestyle, a family of four needs to make $68,274 annually (citation). These statistics propose a very dichotomy between college costs and income. In fact, "The majority of Americans now believe that the middle class has less opportunity to get ahead than in previous decades (. . .) less job and financial security (. . .) and less expendable income after covering basic expenses. Hard work is not enough to keep up. (Rapoport et al). Unfortunately, these types of statistics are all too often becoming the prominent outlook on American life. The data raises concerns as to what kind of life Americans are making for themselves and if higher education really lends itself to opportunities in this economy.
The exponential increase of student loan debt has been evident over the last thirty years, but the recent economic downturn pushed the crisis to a new dangerous level. The Great Recession exacerbated the student debt crisis by scaring policymakers. In reaction to the failing economy, state governments quickly implemented deep education budget cuts that set off a chain reaction of unfortunate consequences for the student. For instance, tuition increased 27 percent at public universities to make up for lost revenue. At the same time, median income actually shrank (Johnson). Separately, the Great Recession also affected families as unemployment rates increased and wages were cut. The result was more emotional and financial stress on families to try to maintain their financial stability (Austin 332-333). Consequently, student loans skyrocketed as many families were unable to cover basic expenses, let alone afford higher education.
Although the great recession is driving much of the adversity in obtaining a higher education, certain behaviors by the financial and educational institutions are specifically to blame. In particular, aggressive lending tactics by private, public, and for-profit schools, in congruence with financial institutions, are manifesting excessive debt. This is happening by irresponsibly lending and misleading students. Richard Cordray, director of the Consumer Financial Protection Bureau, has called these tactics "strikingly similar" to those of the mortgage industry when subprime loans skyrocketed (Johnson). This is a scary proposition as the mortgage crisis lead America to a huge economic recession. For example, "Universities like N.Y.U. enrolled students without asking many questions about whether they could afford a $50,000 annual tuition bill. Then the colleges introduced the students to lenders who underwrote big loans without any idea of what the students might earn someday -just like the mortgage lenders who didn't ask borrowers to verify their incomes (Lieber). Just like there are many opinions for who is to blame for the mortgage crisis, so too remains the same for the student debt crisis. What is known is that there is definitely a lack of responsibility. Some would argue that irresponsibly lending should lie directly on the student.
Despite irresponsible lending tactics by both institutions, the individual student is ultimately responsible for their own decisions concerning their lives. However, if they are not provided the necessary information they need in order to make good decision, it quickly becomes very easy to make a bad one. University admissions are not fully transparent with enrolling students. In an effort to maximize enrollment, colleges will often misadvise in order to keep enrollment numbers up. Joan H. Crissman, interim president and chief executive of the National Association of Student Financial Aid Administrators states that "Aid administrators want to keep their jobs. If the administration finds out that you're encouraging students to go to a cheaper school just because you don't think they can handle the debt load, I don't think that's going to mesh very well." (Lieber). Unfortunately, that is the reality of the situation. Not all information is provided to students and according to Michael Martin of Tell Me More an NPR broadcast, "What resources are available to people who are 16, 17, 18 years old making these enormous decisions with a lot of money on the line? You know, are guidance counselors there, or are they totally overworked (Martin)?" This is an interesting question to ask. There is disconnect between social responsibility and the financial bottom line that effects the outlook on American lives.
Financial bottom line has taken priority over education. Tuition has increased in order to make up for lost revenue from state budget cuts. For instance, in Arizona and California, tuition rates are up 70 percent at four-year colleges (Oliff et al). That is a dramatic increase that no doubt puts financial stress on many families and students. It seems as though the state governments have chosen not to make education a priority as the budget cuts are heavily focused in education. Perhaps state policy makers should make a better balance of where they are making these cuts. Policy makers "rely too heavily on educational budget cuts" to remedy lack of revenue (Oliff et al). This knee jerk reaction to the economic downturn has now limited opportunities for individuals trying to make a good life for themselves with the skyrocketing tuition.
Despite the tuition increase, the state budget cuts continue to affect the individual student. Quality of education has declined for students as colleges have cut staff and eliminated programs. Specifically in Arizona, the university system "cut more than 2,100 positions; merged, consolidated or eliminated 182 colleges (. . .) and closed eight extension campuses" (Oliff et al). What does this mean for the individual student? Consequently, students have a narrower scope of educational options and often suffer academically because of increasing class sizes. Research by James Monks and Robert Schmidt of the University of Richmond suggests that these large class sizes can stretch faculty beyond their abilities to teach effectively thus, degrading the quality of education for the student (Oliff et al). Deep state budget cuts are obviously setting off chain reactions that are detrimental to American invested future.
Accordingly, the lack of expendable income from families and students paying for college is affecting their purchasing power. Assets are declining as more life decisions, like marriage and buying a house, are delayed. A survey of Consumer Finances found that "In the 2007 (. . .), 19 percent of working-age households reported having no assets or negative wealth. By 2010 that figure had risen to 33 percent, (. . . ) " (Rapoport et al). Excessive debt can really restrict a lot of buying options for individuals and families alike. The consequences of this have a great effect on the economy but also an individual's personal life. As result of financial stress, student loan debtors experience high levels of personal depression, family dysfunction, adverse health effects, and delay major purchases (Austin). In fact, higher student debt results in lower homeownership rates (Oliff et al). Often, individuals are using all expendable income to pay off educational debt, therefore, major life decisions have been limited including purchasing a house and perhaps starting a family.
In the same way higher education debt is taking control over buying power, it is also digging into reserves. Americans are now stretched so thin financially that savings has declined noticeably over the years. In 1980, household savings was at 10 percent. By 2006, household savings rate declined to 1 percent (Dwyer et al). This is a drastic drop that doesn't suggest American households are any better off than thirty years ago, perhaps worse. Typically, financial planners suggest 6 months of emergency savings yet three-quarters of Americans do not have sufficient emergency funds (Rapoport et al). It is increasingly harder and harder to exist within the world and anticipate costs that won't break the bank. To illustrate, "About one in three American adults say that if they lost their job they would not be able to pay their housing (mortgage or rent payment) for even a month. About one in four Americans say they have no emergency savings at all and would have to borrow from family and friends if faced with an emergency car repair, medical bill, or job loss" (Rapoport et al). It seems that most educated people are not much better off than someone else who didn't go to college.
If the decline of assets and savings wasn't unfortunate enough, many loans are now co-signed by a parent, which widens the reach of the crisis. Family members are now co-signing on loans to help afford higher education for their children. "In 2008 the number of private student loans with a co-signer was 67 percent, but by 2011 that share jumped to 90 percent" (Johnson). Families are now committing further and further to the shackles of debt with less flexibility of getting out of it. Parents typically want what's best for their children and make sacrifices accordingly. Parents in Arizona alone have seen a 77 percent increase in college costs (Sanchez). The American ideal that hard work and education will bring economic success is questionable.
Having a co-signer or not, large college costs still leads to distress. The cost of higher education threatens college attendance, which has adverse affects on positioning well for a comfortable life. It's not much of a surprise that rapid increases in tuition will most likely lead students to work a significant amount of hours to pay for their education while in school. Working extra hours consequently places students at a high risk of dropping out. According to a 2003 study from the U.S. Government Accountability Office, students who work more than 20 hours a week are less likely to complete their degree (Oliff et al). The potential financial stress of financing higher education could also change the landscape of graduates in America. With astronomical college costs, the United States might very well produce more associate than bachelor degrees. According to the Department of Education, over the last decade, enrollment of middle-income students in four-year colleges has declined as enrollment in two-year colleges is on the rise (Censky). This is unfortunate and illustrates how out of touch with reality college costs have become. Many good intentioned students can just not take on the financial demands leaving them stranded in a certain socioeconomic status.
It is no doubt difficult to find ways to afford college and it reaches beyond the expected 20 years. Unfortunately, paying off loans extends into the later years of life, resulting in less financial freedom. In fact, college students today will most likely be paying back their own student loans when their kids are attending college (Censky). This is a scary reality. If the financial policies for higher education remain unchanged, there will not be much opportunity in life beyond the indentured servitude of paying back debt. Approximately 10 percent, or $100billion of the estimated $1 trillion in higher education debt is reserved to those parents helping pay for their children's college (Censky). This is a stark wakeup call that higher education costs are really eliminating opportunity of financial freedom for the future. At some point, is the price of education worth the servitude it takes to pay it back?
The lack of assets, savings, and opportunities is unfortunate but perhaps what's more disheartening for Americans is whether or not the price of education is worth the costs. American ideals and the reality of financial stability do not coincide. In fact, 91 percent of Americans believe that financial success is derived from hard work and a college education. This hard work lends itself to economic opportunities that eventually lead to economic success. (Rapoport et al). That ideal is becoming more and more a fallacy today as higher education costs prevent any sort of financial independence. Everyday real world experiences rival American Dream ideals.
Despite the differences, higher education continues to be the forefront of mobility. Return on investment does happen just perhaps only for a select few. It is arguable that getting a college degree is a necessity to achieve middle-class status. Research shows that a college graduate makes $12,000 more a year, has lower unemployment rates, and generates over $1 million more in income over their life than someone who did not go to college (Oliff et al). What's important to ask is whether or not that extra income is expendable or dedicated to paying off college debts (children's included. The numbers do not necessarily illustrate the fatigue and grief of paying back debt. Investing in higher education can be a gamble that doesn't necessarily yield desirable results. "We now have a pay-to-play, winner-take-all game where the wealthiest are assured a spot, and the rest are compelled to take a gamble on huge debts, with no guarantee of a payoff" (Stiglitz). More and more, the idea of investing in education within this economy has shown its risks.
All investment risk aside, the statistics do reveal an increase in income. Although statistically, salaries increase with a college degree, it is not enough to maintain a comfortable standard of living in today's world. "Many American jobs do not pay enough to cover basic living expenses, (. . .) (Rapoport et al). Even with hard work, determination and a college degree, financial stability is not guaranteed like it was many decades ago. A recent analysis reveals that 62 percent of middle class Americans had to reduce spending because money wasn't expendable ("The Lost Decade"). This evidence raises concern about the effectiveness of higher education in the American economy.
Trying to fix the student loan debt crisis in hopes of a better life for future Americans is a very daunting and ambiguous task. However, tackling the issues step by step might help lead us out of this increasingly dangerous bubble. For starters, Universities need to offer more student support so that students can make better-informed decisions with financial aid. Financial aid forms are notorious amongst students and counselors alike for their complexity and confusion. According to an interview by NPR's Morning Edition, "that thing can be so confusing it leaves you having more questions than answers (. . .) if there's a way to simplify that letter, that could go a long way to helping people" (Martin). Simplifying a financial aid letter, although small, might be a very valuable step in the right direction if we want young adults to make the best decisions for themselves. Senator Tom Harkin, an advocate against for-profit schools remarks that "Community colleges and our public institutions, [are] not in the business of making a profit...they should be putting more into student support services and education" (Harkin). Overall, if there is a shift in more informational support from the Universities, it might curtail some students from making poor decisions.
In addition to offering more student support, small changes in the way financial institutions collect on student loan debt could be helpful. Educational loans should follow how other loans are forgiven. Currently, educational loans are virtually impossible to write off in bankruptcy court (Stiglitz). It might be in the best interest of the economy if some of the forgiveness on these loans were more flexible and catered to individual situations. For example,
"Australia has designed a system of publicly provided income-contingent loans that all students must take out. Repayments vary according to individual income after graduation. This aligns the incentives of the providers of education and the receivers. Both have an incentive to see that students do well. It means that if an unfortunate event happens, like an illness or an accident, the loan obligation is automatically reduced. It means that the burden of the debt is always commensurate with an individual's ability to repay. The repayments are collected through the tax system, minimizing the administrative costs" (Johnson).
It is no secret that the costs of higher education are changing the American landscape. The statistical data inevitably illustrates an economic crisis that has significant repercussions on the American lifestyle. Soaring higher education costs are at odds with American ideals, limiting prosperity and leading many to financial slavery. To reverse the trends of this crisis, attention will need to be directed to the effects rather than the causes. Forward thought might evoke awareness amongst policy makers to bring effective solutions that will correct this broken system. If education can once again be a priority in this nation, there is no doubt we will begin to find a solution to this problem.
Works Cited
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