By Eric Bledsoe
Congressional Democrats, spearheaded by Sen. Elizabeth Warren (D-MA) and Rep. Alexandria Ocasio-Cortez (D-NY), have been rallying around their newest big government giveaway: student debt forgiveness. While their proposal has the benefit of grabbing headlines, what it lacks is a true, long-term solution that doesn’t ask hardworking people to foot the bill for other people’s debts.
Instead, the Left would do well to focus on transparency and accountability measures that will help prevent crushing student loan debt and ensure a better financial future for the next generation.
Student debt is now more than $1.7 trillion, with the average borrower owing nearly $30,000 at graduation. After six months, only half of the college graduating class of 2020 was employed full time, according to a study from the National Association of Colleges and Employers. In 2019, that figure was 55%, so the COVID-19 economy cannot take the blame. In fact, the Federal Reserve Bank of New York reported last year that 44% of college graduates work in jobs that do not even require a college degree. There is a serious disconnect between schools and students in preparing the next generation for lifelong success in a modern economy.
The idea that one must go to college to be successful is antiquated and harmful to anyone who seeks a different path. Often, high school students are told the four-year bachelor’s degree is their only ticket to prosperity. However, many of those without four-year degrees earn more money than those with four-year degrees. High school students often are not presented with all the options available to them. School boards and guidance counselors need to shift their outdated thinking and set students on a path to achieve their American dream — which, often, does not require a college degree.
And while the groundwork is being laid in high school classrooms, college campuses must do their part to inform their students properly about the true outcomes and debt associated with their degree programs. Students often enter college without the information needed to make the best decisions about their futures and leave with crushing debt that hinders their ability to achieve financial security.
When a high school student considers whether to attend college, he or she should be able to easily receive answers to some very basic questions, such as, “How much debt, on average, do students at this college incur?” and “What are the employment rates and average starting salaries for graduates at this college by major?”
Colleges provide some of this information to the Department of Education, but it is not always easily accessible. And often higher education institutions mislead prospective students with incomplete data. For instance, though the Bachelor of Arts degree is commonly acknowledged as a four-year program, only 41% of college students graduate in four years on average.
Some states are working to rectify the problem. This year, Virginia and Ohio passed Student Right to Know legislation that will make this information more accessible to students and families considering college in their states. And this year, Florida launched the MyFloridaFuture tool, resulting from last year’s legislation, for students and parents. These measures will give them the best information available so they can make informed decisions about their educational and professional future.
As more states look to implement these transparency reforms, the federal government should take note. High school and college students should have accurate educational and professional information that empowers them to make sound financial decisions that mesh with their career goals. Moreover, colleges should be held accountable for the value they provide and the data they report. If higher education institutions do not meet appropriate benchmarks for four-year graduation rates, tuition increases, student loan default rates, and other metrics, their access to federal funding should be limited.
Forgiving student debt will only further inflate the cost of college, leading to more debt. Instead, lawmakers should focus on solutions that truly help families avoid making costly mistakes that they will be paying for in decades to come.