The whole world is asking why American colleges and universities have gotten so expensive.
And—it’s an increasingly urgent problem to solve. Since I went to college, the average sticker price of attending a private, four-year college or university has more than doubled. And if the current trajectory continues, my 13-year-old daughter will pay double today’s sticker price by the time she’s a senior in college. Higher education is priceless, but too expensive.
AS STICKER PRICES INCREASE, ENROLLMENTS CONTINUE TO DECLINE
Since 2000, enrollment at four-year institutions has declined 1-2% per year, declining by 5% after the COVID-19 pandemic. A multitude of reasons are behind the drop in enrollment, including declining U.S. birth rates. It’s beyond all doubt, however, that the biggest factor driving lower enrollments is the ever-increasing cost of accessing higher education.
Critics might point out that most students pay less than the sticker price, but 73% of high schoolers will eliminate certain colleges from consideration because of the sticker price alone, and 20% are considering delaying college—or skipping it altogether.
These facts aren’t exactly a ringing endorsement of higher education and its perceived ROI, but if declining enrollments persist, what’s at stake is nothing less than the competitiveness of the American economy and the broader American Dream.
STUDENT LOANS VERSUS TREEHOUSE HOMES
Fans of the American music duo, Twenty One Pilots, will undoubtedly be familiar with the hit song, Stressed Out—having been streamed on Spotify more than 1.5 billion times. The song broadly addresses the generational concerns of America’s youth, with one notable lyric stating:
Out of student loans and treehouse homes,
we all would take the latter/ladder.
The words require little interpretation: student loans aren’t a desirable means to a desirable end.
It’s a lesson that not enough university administrators fully comprehend. Shorter, less expensive, “just in time” credentials are becoming increasingly popular at the expense of the more thorough, well-rounded degree. Consider the following about coding bootcamps, as reported in Course Report:
- The typical cost of a coding bootcamp is $14,000 and takes 3-6 months to complete
- Coding bootcamps are operating in 85 cities across North America (and many are fully remote and accessible from anywhere)
- These programs typically graduate 25,000 students per year, accounting for $350 million in tuition revenue
As alternative credentials, such as boot camps, continue to grow in popularity, what’s at stake is much more than just the viability of traditional four-year degree programs.
THE ROAD TO THE AMERICAN DREAM STILL PASSES THROUGH COLLEGE
In 2019, I assumed the office of President of Hope College. Although I had graduated from Hope nearly two decades prior, the path that led me back to Holland, Michigan, passed through both the public and private sectors. I saw first-hand how economic and financial systems worked differently for different people.
I realized that income inequality is a symptom of the problem of education inequality. Income is the outcome. Increasing costs erodes access to a college education, which increases inequality of the outcome. And, where access is possible, increasing numbers of students (and their parents) are “purchasing” it by taking on insurmountable amounts of debt.
It was these years of work in both government and financial services that forced me to confront a question that is central to our national moment: how hard are we willing to work to be a land of opportunity for all versus a land of privilege for the few?
How hard are we willing to work to be a land of opportunity for all versus a land of privilege for the few?
DECLINING COLLEGE ENROLLMENTS POSE CRITICAL RISKS TO THE U.S.
Globally, obtaining a college degree remains exceptionally uncommon—just 6.7% of the world has done so. And although that percentage averages 45% in the United States, it is a downward trend in enrollments that poses three critical risks for our country.
- National Competitiveness: Thriving economies depend on a division of labor that enables workers to specialize in different job functions. With fewer Americans pursuing higher education, we risk losing those skills that are needed to run companies, manage large teams, improve complex processes, and more.
- Career Growth Potential: Alternatives to the four-year degree program exist in the form of bootcamps and technical colleges. Although we must acknowledge the value and importance of such options, the overarching tendency of such programs is to get graduates on the fastest path to their first job, not a path to long-term career growth. In other words, the four-year degree remains the most predictable path to upward mobility.
- Creativity and Broad Thinking: Jobs, and the skills required to be successful in them, will constantly change as technologies evolve. What will not change, however, is the need for good thinking, creativity, the ability to analyze, and the ability to lead and mentor other human beings. Those abilities are gained most often in the very degree programs that fewer students now pursue.
STUDENTS DESERVE HOPE
For me, the American Dream is not how an average person can acquire wealth, but rather how an average person can make a transformative impact on others. It was with this thought in mind that, in 2018, I applied for the position of President of Hope College. My North Star was—and remains—a desire to change how students access higher education.
This article is the first in a series in which I’ll be exploring the ways that the economics of higher education influence the decisions students make about their education—and what we (as a country) can do to improve access to higher education.
Solving the challenge of access will require the work of many along with the formation of a movement that believes in the cause and has a desire for transformative impact. I invite you to comment and share your own thoughts, insights, and experiences as we go.