Fixing the College Affordability Crisis

With President Biden’s announcement yesterday of his plan to forgive up to $20,000 in student loan debt to eligible Americans, I wanted to share my thoughts on the topic, which I’ve been thinking about for quite a while.

I’ve believed for a long time that student loan forgiveness is the right thing to do. I received student loans – my parents were immigrants, and my dad ran a produce stand. Student loans were the only way I was ever going to afford college.

When I was in college, though, (even if you adjust for inflation) the opportunities I had when I graduated allowed me to pay off my loans in a reasonable timeline. But nowadays, the cost of college indentures students for decades. But how are schools held accountable for massive tuition hikes?

Yesterday’s announcement is a good first step in that direction, and there are some?worthwhile pieces in the proposal to protect borrowers, but it isn’t sufficient on its own. What we’re facing is a structural problem in higher education where costs far outpace what most students can afford.?

Here are some ideas I have to fix the college affordability crisis, from my experience in higher education:

1. Instead of providing a fixed dollar amount of forgiveness, the government should forgive a percentage of student debt so that it has a proportional impact across debt levels. For instance, 10% for all borrowers would make it easier for all borrowers to pay their loans.
2. Interest rates should be kept low. Some experts even have argued for a 0% interest rate. But generally,?if you want to pursue a career that requires years of higher education, I don't think you shouldn’t be burdened with the bill for the rest of your life.?The world needs teachers, social workers, attorneys, doctors, accountants, scientists and pharmacists, and the cost of education should not be a disincentive for people to get the education they need to succeed in highly skilled fields.
3. Start holding schools accountable for how expensive they are, and for how successful graduates are. There should be a direct connection between the product a student pays for and deserves (ie the education they receive), and the support they get to find employment when they graduate.
4. In some sectors, there’s a?stigma around trade schools, or even starting out at a community college. This is impractical in a variety of ways. We ought to be making it easier to help students find the right fit and earn a living, not harder.

President Biden’s proposal is the start, but there’s a long history that needs to be unpacked to push the government to ensure education is affordable, help fortify our labor force, and ensure that people coming out of school can earn a living and become debt free. One stroke of the pen won't solve that. The Feds can do a lot more - which may require working with colleges and universities to better address where the current higher education system has not served the higher good of the students.