The Biden administration has promised to make a decision on student loan forgiveness within weeks or even days. And yet, the affordability of colleges will remain an issue for years to come, say experts.
Increasingly, high school students are reconsidering the value of a four-year degree. Many are now saying it’s just not worth the sky-high cost.
“More and more people are asking, Is college even worth it?” said Jason Wingard, president of Temple University and author of The College Devaluation Crisis.
More from Personal Finance:
University enrollments continue to decline
Inflation makes college even more expensive
Would you be included in the student loan waiver?
“For 50 or 60 years it was undeniable; now we’re seeing a flatline,” he added. “Higher education needs to be pivotal for the first time to be relevant.”
The college system should be more responsive to rapidly evolving workplace needs to better position graduates for employment and career success, Wingard argued in his book.
Firms’ hiring practices are beginning to prioritize skills over credentials, he said. For higher education, “that means being more applied and not just theoretical.” (Some institutions have already cut back academic programs that were once central to liberal arts education.)
College is getting more and more expensive
Temple University President Jason Wingard speaks during the memorial service for victims of a fatal row house fire at Temple University in Philadelphia, Monday, January 17, 2022.
Getting a college education is now the second largest expense a person is likely to make in their lifetime, right after buying a home.
But it wasn’t always like that.
According to an analysis by the Center on Budget and Policy Priorities, a nonpartisan research group based in Washington, DC, deep cuts in government funding for higher education have contributed to significant tuition increases and shifted a larger portion of college costs to students
Schools are under constant pressure to cut costs, admit more students who need less help, or increase tuition. This year, some colleges are raising tuition by as much as 5%, citing inflation and other concerns.
“We’re not getting more money from the state, and the market wants us to charge less,” Wingard said, but “every single price is going through the roof,” he noted, citing rising spending on faculties, buildings and more maintenance , books and materials, technology and cybersecurity. “That’s impossible.”
“We need to make education more affordable for students,” he added. “If government can’t help make education more affordable, students will stop seeing higher education as a viable choice, a worthwhile choice.
“This is a critical time.”
“I don’t think higher education should be that expensive,” said Kaya Jones, 23, who graduated from Temple in 2020 with a bachelor’s degree in political science and journalism.
To pay for school, Jones worked two jobs and relied on a combination of resources, including contributions from friends and family and student debt.
“It definitely took a whole village,” she said.
Jones is now a program coordinator at Ignite, a women’s political leadership program, and still owes around $35,000 in loans, not including the Parent PLUS loan, on her mother’s behalf.
Students want colleges that offer better value for money
Currently, according to GradGuard and College Pulse’s 2022 College Confidence Index, 83% of college students are totally, very, or somewhat confident “that they will make enough money to be worth the cost of college.” Parents are less convinced: 63% are confident that a college education will get their children a good job and only 60% said it’s a worthwhile investment.
“Students and their families are cautious when assessing the college’s return on investment as with other large consumer purchases,” said John Fees, co-founder and chief executive officer of GradGuard, a tuition insurance provider. In addition, “this has implications for the functioning of institutions,” he added.
According to Eric Greenberg, president of Greenberg Educational Group, a New York-based consulting firm, today’s students and parents want to get the most bang for their college bucks.
“There’s a lot more talk about pre-professionalism,” he said.
In addition to costs and academic offerings, families should look at pre-professional services, alumni networks, job placement, and average salaries initially and 10 to 15 years later, he said. Then, Greenberg said, “it becomes less about them [name brand].”
Subscribe to CNBC on YouTube.
https://www.cnbc.com/2022/08/09/with-or-without-student-loan-forgiveness-college-still-costs-too-much.html With or without student loan forgiveness, college is still costing too much