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American Students Owe $1.7 Trillion in Debt – this system isn’t working for anybody

We talk a lot about the way in which higher education’s business model is breaking down, and here’s one of the reasons why it deserves to:  student debt has more than doubled in the United States over the last 10 years.  American students now owe more than $1.7 trillion dollars in debt for their education.  

It should be obvious - it is obvious - that this is unsustainable, and people say so all the time.  Yet somehow very little changes.

Except that recently, maybe something has: for the first time in the modern era of higher education, there’s a movement across colleges to cut tuition.  Davidson College, in North Carolina, has frozen its tuition.  Oberlin College, in Ohio, has cut its tuition by $10,000.  Southern New Hampshire University, Rider University, and Fairleigh Dickinson University have all announced similar cuts - in the $10,000 - $15,000 range; and Denison University is offering all Ohio residents a $100,000 scholarship.  

This is good news for students, but even saving tens of thousands of dollars over four years isn’t enough to address the student debt crisis. Student loans will still be incredibly heavy to carry for working families and students who go into crucial but not high earning fields. It's a step in the right direction, but hardly a solution.  

Meanwhile this is terrible news for colleges, many of which were struggling before COVID-19 and now desperately need the dollars they’re losing in tuition if they’re going to keep their doors open.  They’re not making these offers from a place of strength, but a place of weakness; under current conditions this is not a sustainable or long-term solution.

Falling tuitions, in other words – even if they continue and become more widespread – are at best a stopgap measure, and not a long-term solution for either students or colleges.

There is a solution, one we know would work: adequately fund public colleges and universities so that they can provide a first-rate education without forcing students to go into serious debt. It’s entirely possible to do as we’ve done it before. It was only as state and federal funding of colleges and universities started to drop significantly that we entered into this spiral.

But if that’s not going to happen, then we’ll need to experiment and try things that we haven’t tried before. Develop new models that involve online tools and new technologies to provide the experience and education that college students want (not settle for, but want) at a significantly reduced cost. Just “going online” isn’t enough – on the contrary, the amount of student debt being generated by online, for-profit colleges, is absurd in its own right - an average of $36,000 according to a 2019 study, for a degree that is often much less helpful - and is increasing.  We need to experiment with every aspect of college systems, rather than recreating the current model online.  

This may not lead to one kind of college that everyone takes, but many kinds of colleges offering different kinds of experiences.  If that happens equity and accessibility will be key questions such as how we keep colleges from being segregated by income and race – but that’s a problem we’re already grappling with, not a virtue of the current system.  

That’s a lot of unknowns, but they’re the right challenges, because the one thing we know for sure is that the present system, as everybody knows, isn’t really sustainable.