As colleges become more like pricey four-year summer camps, student debts rise, and a diploma stops guaranteeing future job prospects, more and more people are wondering whether an undergraduate degree is worth it. Let’s be clear about this: Unless you are already among the elite, in the vast majority of cases a degree is absolutely worth it. In fact, a degree is becoming ever more critical to success.
Study after study shows this. A college education remains one of the best predictors to increased income, with college graduates earning about $20,000 more per year than high school graduates. Put another way, the economic payoff for a college degree has approximately doubled in the last 33 years.
But according to a Pew survey, 75% of Americans believe college is too expensive for most to afford. The cost of college has skyrocketed since 1978. Tuition and fees have risen a mind-boggling 1,120% since 1978. Student loan debt now totals over $1 trillion. And nearly 35% of students were unable to attend their first-choice college because of the cost—despite being accepted.
None of this is sustainable, especially if America is interested in tackling the rising income inequality of today. Here are some of the most interesting proposals that could reverse these trends and make college a right of passage for all.
President Obama announced at the beginning of this year a plan to make tuition for two-year community colleges free. That free tuition will also apply for students who begin at community college and transfer to a four-year university. Under the president’s plan, called America’s College Promise, community college will be funded primarily by the federal government, with states covering the remainder.
America’s College Promise is modeled on a similar plan which began this year in Tennessee. That plan–the Tennessee Promise–had 90% of graduating high school seniors in the state apply for it. What’s more, the percentage of black and Latino students who applied for the program is greater than that of black and Latino students currently enrolled in college across the state, demonstrating its potential for increasing college education for people who lack access. Some have criticized the president’s plan because it only covers tuition and not books or living expenses, which would limit the program’s effectiveness. Students would also need to maintain a 2.5 GPA to qualify for free tuition.
Vermont senator and Democratic presidential candidate Bernie Sanders has introduced legislation more comprehensive and far-reaching than the Obama’s. The senator’s proposal would make all public four-year colleges and universities free. Similar to Obama’s plan, the federal government would pay for most of the bill with states pitching in a smaller portion. Unlike the Obama plan, Senator Sanders’s would also cover books, school supplies, and living expenses through financial aid and the Pell Grant program.
The plan is modeled on programs in European countries such as Germany, Denmark, and Sweden that all offer free or subsidized college education to their citizens. The biggest obstacle to this legislation would, of course, be the massive price tag of $70 billion a year, which Sanders proposes generating through a modest tax on financial transactions such as stock, bond, and derivative trades.
As a sort of middle option between paying up front for tuition or taking on massive student loans, Oregon has adopted what the state government calls the “Pay it Forward” program. Students pay nothing to attend college, but then fork over a portion of their gross income for a certain number of years. That kind of model has the benefit of having graduates pay for the actual value of their education on the job market, rather than being saddled with debt even if they can’t find a job.
Unfortunately, despite being approved unanimously by the state’s legislature last year, the state has yet to identify a college at which to run a Pay It Forward pilot program. One of the reasons it has stuck in limbo is because of the $6.5 million in seed money required to fund the first students under Pay It Forward. Eventually, though, advocates for the program believe that it will pay for itself, with graduates financing the next round of students over time.
About two thirds of college graduates take out loans, ending up with an average of $23,000 in debt. This year, President Obama announced a plan to limit monthly payments to 10% of gross income for those who choose income-based repayment, rather than the current 15%. Under the president’s plan, any remaining federal debt would be forgiven after 20 years, instead of the current 25.
This year, the Senate rejected a proposal from Massachusetts Senator Elizabeth Warren to allow graduates with higher fixed interest rates on their loans to refinance at the current, lower rate, though it’s possible that Hillary Clinton is going to make this part of her presidential campaign platform. Sanders’s free public university bill also contains similar provisions about student debt refinancing.
Meanwhile, the grassroots movement to do something about rising student debts continues to gain steam. Some who took out loans to attend predatory private colleges are refusing to pay, and others are raising funds to buy and cancel the debts of strangers.
Massive open online courses (MOOCs) have been growing in popularity since 2012 with the launch of Coursera, Udacity, and edX. These and other platforms offer courses and–crucially–certificates of achievement from top universities available for a small fee.
Harvard and MIT, which together co-founded edX, recently released a study on MOOCs. According to their findings, MOOCs have become increasingly popular among female and older participants. In total, some 1 million students joined HarvardX or MITx courses between 2012 and 2014. About a quarter of students pursued a certificate from the university, attesting to the fact that they actually completed the coursework. According to the study, learners who were pursuing a certificate were ultimately more likely to complete the whole course.
In some cases, such as with the Harvard Extension School, MOOCs can actually lead to diplomas from the university offering the classes. But while a regular MOOC certificate might cost $50, if you intend to put that course toward diploma credit you will have to pay full tuition costs of thousands of dollars. So while MOOCs make education accessible to a much wider group of people, they do not right now more easily lead to a college degree. Hopefully, a further study could delve into how employers view certificates earned through MOOCs and whether they would hire someone based on those credentials.
Some schools are forgoing the idea that students should pay for course credits at all, and instead are rolling out what are essentially subscription plans. In the competency-based education model, students pay a flat fee for a semester and can attempt to pass as many courses as they like.
They may have access to online course materials and assignments, as well as advisors. But whether they earn credits to graduate is solely based on whether they can pass tests that measure their skills in each course. The controversial new idea allows students much more flexibility in how they shape their degree. A degree could in theory also be much cheaper, for students who move through a program quickly, but it might also be more expensive for some. Right now, the few programs that exist are mainly experimental. But colleges looking to reduce costs are now looking closely at this model.