A new bipartisan effort could compel colleges to reveal more information about potential debt and likely earnings. According to an article by John Hechinger and Janet Lorin at Bloomberg, both Republican and Democratic politicians are now interested in getting colleges to reveal more information about true costs and student debt:
After a decade of resistance from universities, Congress is poised to take on college prices amid a groundswell of anger about tuition outpacing inflation and family incomes, leaving borrowers with $1 trillion in debt. Politicians from both parties are seeking to compel colleges to tell students how much they could be expected to earn from their degrees, spell out fees and debt in plain English, reward schools that keep tuition affordable — and punish those that don’t.
Some critics suggest that this whole problem is inflated, however.
Politicians and the media are perpetuating “a collision of myths” about student loans, said David Warren, president of the Washington-based National Association of Independent Colleges and Universities, which represents 1,000 private institutions. The average student graduates from a private college with about $30,000 in debt, a manageable amount given they can expect to earn a $44,000 salary, he said.
That sure sounds manageable, except that the median starting salary for college graduates is only $27,000 a year.
Merely supplying students with more information about student debt won’t actually lead to less debt, of course. As I’ve pointed out before, the greater problem in American higher education is a shift in funding for colleges from public money to personal debt. The reason students have such high debt levels now doesn’t stem from some widespread institutional effort to obscure costs. Telling students more about that debt won’t reduce it.
Still, providing students with more information can’t hurt. If everyone truly understands how much of a financial burden education will be, they’ll be better armed to demand reform. Perhaps, though this would only work if lobbying by American colleges doesn’t kill the effort.
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