Special Report

The rising cost of college is causing long-term problems for this generation of graduates. Now that Americans are beginning to recognize the damage student loans are doing, will the government focus on making college more affordable? Or is this just the way things are?

According to a new Gallup-Lumina Foundation poll, many Americans feel that college is no longer affordable. Just 17 percent of white Americans polled believe that “education beyond high school is affordable to anyone in this country who needs it” and only 19 percent of black people polled believe the same.

Hispanics are far more optimistic in their view of college affordability. By way of the Gallup poll, more than 50 percent of Hispanics polled responded that college is affordable to those who live in America.

Separated into three categories of white, black, and Hispanic, the gulf between how Hispanics feel about the cost of higher education compared to whites and blacks is staggering. That may mesh with how some view the outlook and direction of the country.

But this study also mentions the rising cost of tuition and the copious amount of debt that students are saddled with upon exiting college. According to Gallup, tuition at a “public four-year college has increased by more than 250% over the past three decades.”

That’s likely why many students carry an average of $30,000 in student loan debt and why some in the federal government want to extinguish student loan debt when filing for bankruptcy.

This new study is another in a long line of studies that show just how un-affordable higher education has become for some. With the rising cost of tuition and student fees, many students are being priced out of the ability to attain a college degree.

Even Senator Elizabeth Warren called out the federal government for its student loan problem. She said that outstanding student loan debt needs to be refinanced and that “college affordability and student debt” are issues that need to be included in the re-authorization of the Higher Education Act.

The cost is turning off some students as they are afraid of amassing thousands of dollars in debt and ruining their financial future. If anything, this shows just how dire the situation has become and why the federal government needs to act on fixing the problem.

Just how bad is this college debt problem, anyway?

Consider this. In the fall of 2012, 66 percent of high school graduates from that year were enrolled in college, and that number does not include students that waited longer to enroll or non-traditional adult students.

Currently, there is a call for a more affordable college education, which makes sense. It comes on the heels of a recession that undercut the value of a college education. Even those with a college degree were not immune to the financial hit that the economy took and those still paying off their student loans were often left without the very job they had always assumed would pay off their educational debts.

A study by the Urban Institute found that almost 300,000 Americans with master’s degrees were on public relief, along with 30,000 with doctorates. The average debt of a college graduate is $35,200 and that can take decades to pay off.

For black students, this issue can be even worse. A Gallup poll found that in the last 14 years, around half of black college students graduated with student loan debt exceeding $25,000. This is compared to 35 percent of white students had loan debt that high.

Often the only way for black students to afford a college education is by taking on these loans. Four out of five black students take student loans to attend college and typically have nearly $4,000 more student loan debt compared to white students, according to a 2013 report by The Center for American Progress.

There is deep inequality here in the U.S. In 2013, the median income for black households was $34,600, and the poverty rate is 27%, nearly three times that of white Americans.

Furthermore, college students with high debt tend to suffer long-term health issues

According to a new study via Gallup.com, college graduates “who took on the highest amounts of student debt, $50,000 or more, are less likely than their fellow graduates who did not borrow for college to be thriving in four of five elements of well-being: purpose, financial, community, and physical.”

The survey has an area of 25-years as Gallup only polled individuals who graduated college between 1990-2014. What the study found is that graduates who are burdened with $50,000 or more in student loan debt may struggle to repay their loans, which in turn has causes them to delay making large purchases, e.g. buying a new home.

Those saddled with debt are unable to save as much as their counterparts who do not have as much debt or none at all, and Gallup’s “thriving gap,” percentages between those with $50,000 in debt less the percentage of student’s without it, shows an 11 point percentage spread between the two parties.

The study also found that more recent college graduates seem to be performing worse than those who graduated before 2000. Those who obtained a college degree between the years of 1990-1999 are doing better socially, physically, and in purpose.

Student loan debt now outweighs credit card debt and has surpassed $1 trillion. With wage growth still stagnant and many individuals going without full employment, this will mean more health issues and many former graduates with void savings accounts as well.

Even the coveted private school does not pay off right away

Ivy League schools are prestigious, with many students vying for acceptance and few earning a spot as an attendee. However, for people seeking the cushiest early-career salaries, the Ivy Leagues aren’t paying off instantly.

Princeton, Harvard, Yale and Columbia don’t make it into the top 30 universities for starting salaries. The University of Chicago, a tie for fourth, doesn’t make the top 200.

The PayScale survey tells us that Princeton, the highest performing Ivy League school offers its graduates a median starting salary of $60,000 – earning is the 34^th highest in the country.

And spending a year’s worth of salary for one year of higher education at Harvard does not always lead to great career results.

According to U.S. News and World Report, a recent Brookings Study shows that “other schools may either not cost as much and yield a similar salary and success of loan repayment, or they may cost about the same but generate higher earnings potential.”

On the other hand, going to an elite military or tech school might just be your best bet. For example, graduates of the United States Naval Academy at Annapolis earn a median annual salary of over $80,000 over their first five years post-graduation, earning the school the top number of surveyed schools.

Now granted, the nation’s traditionally elite schools distinguish themselves with a salary growth near graduates’ mid-career. Graduates from Ivy League and like schools see their pay jump significantly when they are more than ten years past graduation. But the quick payoff that many students expect after graduating from Harvard or Yale may not happen.

On the flip side, there are options today, especially with online courses. With less red tape than the traditional college format, online students can earn credits while still working full time, maintaining families and dealing with illnesses. Whether students take just one course remotely or obtain an entire degree, they can take on the demands of college life more readily.

Each year online learning initiatives becomes less of a fringe movement and more of an incorporated and accepted, form of education. More than 6.7 million people took at least one online class in the fall of 2011, and 32 percent of college students now take at least one online course during their matriculation. It is even becoming commonplace for high schools to require all students to take an online class before graduation as a way to prep them for the “real world” of secondary education.

The flexibility and convenience of online learning are well known but what is not as readily talked about is the way distance education promotes diversity of the college population. With less red tape than the traditional college format, online students can earn credits while still working full time, maintaining families and dealing with illnesses. Whether students take just one course remotely or obtain an entire degree, they can take on the demands of college life more readily – leading to a student population with more variety.

The Babson Survey Research Group recently revealed that while online college student enrollment is on the rise, traditional colleges and universities saw their first drop in enrollment in the ten years the survey has been conducted. This drop is small – less than a tenth of one percent – but its significance is big. A trend toward the educational equality of online curriculum is being realized by students, institutions, and employers across the board. The benefits of a college education through quality online initiatives are now becoming more accessible to students that simply cannot commit to the constraints of a traditional campus setting.

A controversial experiment that could lead the way to even more college credit accessibility is MOOCs or massive open online courses. As the name implies, these classes are offered to the general public at a low cost, or no cost, in the hopes of earning their students college credit. California-based online course provider Coursera recently had five of its offerings evaluated by the American Council on Education for college credit validity. Four of the courses were recommended for college credit by ACE, and one was endorsed for vocational credit, providing student work verification through a strict proctoring process.

These credits are not earned through community colleges or online-institutions; Duke University, the University of California at Irvine and the University of Pennsylvania are on Coursera’s list of places the courses will earn credit for students that pay a nominal fee. Students that obtain these credits through Coursera can approach any higher education institution and seek their inclusion in a degree program, but the final discretion is up to the particular school.

MOCCs are certainly in an infancy stage and do not provide a “sure thing” yet for students that participate. In the Babson survey mentioned earlier, only 2.6 percent of schools offer a MOOC, but an additional 9.4 percent are building a MOCC plan. The potential for further diversity and equality in education through MOCCs is certainly on the horizon. This form of online learning means that students do not have to commit to an entire course of study to obtain credits or even commit to a particular institution upfront.

MOOCs will further eliminate the socio-economic barriers that keep promising students from seeking out college credits. Students are given more flexibility in scheduling at an affordable price. Though the MOOC trend has its dissenters, I believe it will win over even the most skeptical and increase accessibility for all people that seek higher education. After all, at one time the mention of online courses raised a few eyebrows in the educational community and look how far the concept has come.

Plus, not everyone is paying full price for a college education. In fact, a vast majority are paying below the advertised price.

By way of NPR.org, the National Association of College and University Business Officers conducted a study “of tuition discounts at private, nonprofit, four-year colleges and universities.”

The information released in the survey suggests that all colleges that were surveyed offered some sort of discounts to its students.

“They estimate 89 percent of first-time, full-year freshmen received some discount in 2014-2015. Of those students, the average grant they received is estimated to cover 54.3 percent of tuition and fees.”

That’s at least half off of student fees and maybe tuition

Still–even with the steep discounts, it’s not enough to curb the rising rate of students who carry too much debt. At least this survey doesn’t go into detail as to how these discounts may offset the full cost of college or how it impacts the load of debt that students carry post-graduation.

While the study is a brief overture into how some schools attend to the full cost of college, it also shows just how expensive some schools are if nearly 90 percent of freshmen can utilize discounts. Wouldn’t it be nice to have a college system that was just plain affordable for all students, without the trappings of all these discounts and needing to spend so much time tracking down the money to attend?

Who wants to make college affordable again?

As it stands, things may not be looking good

According to a study, there is a correlation between the rising cost of Medicaid and declined spending on higher education. Created by Moody’s Analytics for The National Commission on Financing 21st Century Higher Education, the study suggests that state budgets will constrict spending on higher education because of the high cost of Medicaid.

Because money from the Affordable Care Act will start to slow by 2020, many states will have to allocate more funds for Medicaid, which in turn will cause a decrease in discretionary spending.

So, many states that are struggling with budget deficits or have deeply cut funding for higher education will likely face more financial issues.

The study portends that Medicaid will outrun state revenues. If that potential trend holds, then higher education truly is in trouble.

To further foreshadow the problem, higher education spending is only expected to grow by as little as four percent each year. Any growth may look good on the surface, but that type of spending will likely cause many colleges and universities to reshuffle their spending priorities.

Louisiana’s budget crisis led Governor Bobby Jindal to look at cutting a record $600 million from higher education. Because of the loss of funding, Louisiana State University (LSU) planned to file for academic bankruptcy. That will mean that LSU will be forced to raise tuition and student fees, likely pricing some students out of attending the university.

Likely more states that face this crisis of funding will attempt to raise revenues and cut higher ed funding. Unfortunately, education funding is usually the first to get cut when state funding gets tight. Because this issue isn’t supposed to shock state budgets for at least another five years, hopefully, states will take precautions now to prepare for the issues down the road.

Here’s who’s talking about solutions

U.S. Senator Marco Rubio spoke about his efforts in his home state of Florida, and perhaps on a federal level, to make college attendance a shared cost. Rubio is no stranger to college debt. When he arrived at the U.S. Senate, he still had $100,000 in outstanding student loans. Rubio has been upfront about his modest upbringing and also the power his education gave him but he has acknowledged that the cost is too high. The basics of his college plan would allow private investors to pay for the tuition of college students in exchange for a portion of their earnings later on. This would mean the students acquired no traditional debt and would not start out their careers in the hole – at least not in a typical way.

While I like the out-of-the-box thinking of this plan, it raises more questions than answers. At least when a student takes out a federally-backed loan or even a private one that meets federal regulations, there is some protection for the student. I worry that allowing too many private investors in on the college lending game could mean more financial pressure on the borrowers. And what happens if a student finds him or herself unemployed for a long period of time? Or unable to work due to injury? These are all issues that would certainly be addressed before legislation was drafted and approved but there are already some red flags that pop up in this hands-off government approach to college debt reform.

Another college payment idea that is arising across the country is a state-run repayment program that is similar to Rubio’s private investor one. Already in Oregon the Pay It Forward program has been approved (though not yet enacted) that will give students their public college education upfront, free of cost, in exchange for paying the state a portion of their earnings post-college. Supporters bill it as a “debt free” alternative to a college education, but like Rubio’s plan there is still money owed at the end of the college term that does impact actual earnings. It will be interesting to keep an eye on Oregon in the coming years to see how the program impacts the first groups of students who take advantage of it.

What if a public college education was completely free, though? That’s the approach Tennessee Governor Bill Haslam wants to take when it comes to the state’s community colleges. At his State of the State address, he called for free tuition at Tennessee’s community colleges to improve the state’s reputation as one of the least educated. Haslam proposed that the money to pay for it come from the state’s lottery earnings that would be placed in a $300 million endowment fund. While a short-term solution, I’m not sure that this is a sustainable payment plan. But if even one class of students in the state can take advantage of it, that may make a huge positive impact on Tennessee’s long-term economic outlook.

And of course, President Obama has some of his solutions as well. For example, during his 2015 State of the Union address, he laid out proposals to revamp the tax code by raising taxes and fees on the wealthiest Americans and largest financial institutes. The additional money from these taxes would be used to pay for free tuition for two years of community college.

Obama’s plan would give many people in America the opportunity to receive an education– something that many people in our country have always wanted, but could never afford.  The President points out that more people will have the ability to obtain a degree, and we will also see a more competitive nation with a stronger middle-class economy.

In his proposal for free tuition, Obama highlights that students would need to maintain a 2.5 GPA, attend at least half time and be on track to graduate on time. The proposal would not be exclusive to recent high school graduates.

The President estimates the cost of the free tuition program at $6 billion a year

I think community colleges are the key to an affordable education, especially when paired with 4-year college initiatives. If community college becomes more affordable, I think that some students may not have to work full-time as they take classes so that they could quicken the pace of their attendance.

Here are some other ways that the President has increased access to college education:

Enforcement of the DREAM Act. The Development, Relief and Education for Alien Minors, or DREAM, Act will an estimated 2.1 million young people in the U.S. with access to an education and amnesty from deportation. While Obama’s administration has stressed the ethical points of this act, rightfully so, it offers may economic benefits for America as well.

The Center for American Progress estimates that the DREAM Act will create 1.4 million new jobs by the year 2030 and that it will infuse some $329 billion into the U.S. economy.

Pell Grant Increases. The President has also pledged to double the amount of funding available in the form of Pell Grants over the next three years. Unlike student loans, Pell Grants do not need to be repaid. For the 2011–2012 school year, the maximum award amount was $5,550.
While a Pell Grant cannot cover all of the college costs, it goes a long way towards covering in-state tuition or community college courses. All students can apply for the program, too, and students receive aid awards based on financial need and cost of attendance.

By 2017, the maximum amount awarded to students is expected to rise to $5,975. By 2021, the Congressional Budget Office estimates that 820,000 more Pell Grant awards will also be available. The money will come, in part, from restructuring to the distribution of federal student loans. By implementing a direct student loan program, instead of a bank-subsidized one, $68 billion will also be saved by the year 2020.

Higher College Tax Credits. The Obama-Biden administration plans to triple the current tax credits available to students and parents of students paying college expenses, too. The American Opportunity Tax Credit gives a $2,500 tax credit maximum per student and students can claim it for four years.

According to the IRS, up to 40 percent of the credit is refundable, up to $1,000, to people that file even if no taxes are owed. In addition to courses and fees, the new tax credit also covers related costs like books, supplies, and required class materials.

Income-Based Loan Repayment. President Obama has often said that he believes that paying for college should not overwhelm graduates. As a reflection of this, he has pledged to expand income-based repayment options to keep the bills from college from becoming unmanageable. Around two-thirds of college students have a debt of over $23,000 upon graduation. This can be especially difficult for students that want to enter public service jobs and those who face unexpected financial hardships like unemployment or serious illness.

Beginning in 2014, students can limit payments to 10 percent of income – a reduction from 15 percent in the previous law – which means a reduction of $110 per month for unmarried borrowers that owe $20,000 and make $30,000 per year. An estimated 1 million borrowers will be positively impacted by this change in repayment options. Also, borrowers that make monthly payments will be allowed debt forgiveness after 20 years. Public service workers like nurses, teachers, and military employees will receive debt forgiveness after just ten years.

Many Americans wish they could pursue their dream of a college education, but they just do not have the means to follow through with their plans. I appreciate Obama’s focus on the future of America’s children, inclusion and equality, and college affordability.

But as much as the President has done to make college affordable, here’s another big idea to transform the state of college affordability today: a free college education.

Free college: the ultimate solution?

Yes, free college

This is something that presidential hopeful Bernie Sanders hopes to accomplish, in addition to easing the student loan burden that many college graduates carry now.

Currently, student loans are thought of as the cost of doing business. But costs are rising in an out of control manner, and each class that finishes college graduates deeper and deeper in the hole. According to the Boston Globe by way of commondreams.org, the class of 2015 will carry a student loan debt of $56 billion and is “the most indebted class in history.”

What if there was no cost to obtain a college education and it was viewed as a basic right, much like the K-12 public school system? It seems that the knee-jerk response is to claim that the nation can’t afford it. The trillion-dollar college education industry, coupled with the lending companies that “help” finance these endeavors, would feasibly go under if students did not have to find, earn or borrow the tens of thousands necessary to prove they care about their career.

Perhaps that’s true. But how would the economy as a whole look if college student debt disappeared? Instead of taking the first, low-paying job that came along to desperately find the cash to start repaying loans, maybe students would hold out for the perfect job where their talents and education could be best utilized. Instead of the nearly 22 million young adults living at home with their parents, maybe those kids would invest in their housing and start contributing to that industry faster. Parents who save every penny to pay for college would feasibly have more cash to put back into other aspects of the economy, strengthening whatever industries they touched.

When the facts are examined, it seems that the only ones truly benefitting from the current higher education model are the institutions themselves and the companies that support lending. In the second quarter of this year, private lender Sallie Mae reported $543 million in net income. In 2013 alone, Sallie Mae has spent over $1.2 million lobbying against legislation meant to relieve some of the college debt strain. Much like the skyrocketing healthcare industry costs over the past two decades, colleges and lenders have been left to their own devices with improper regulations.

The result is the “soaring college costs” we hear so much about today. According to the College Board in 1992 one year of college at a public four-year institution cost around $7,500 in today’s dollars. Now that cost is $10,000 higher. Private nonprofits cost around $17,000 in 1992; today the cost is nearly $24,000.  The cost of college is a runaway train at this point. College costs have risen faster than the inflation rate for decades.

While an economy hindrance, the high price tag of a college education has very little resistance when observing the nation’s population as a whole. Colleges and lending companies have, for the most part, gotten “a pass” because the pursuit of knowledge is deemed a worthy one where the price should never be considered an issue. Under the guise of a better-educated workforce, colleges and lenders have been able to get away with more than any other industry providing a basic, American service. What would the reaction be if utility costs rose that quickly, or the price of a gallon of milk?

For a college education to have the intended impact on the individual and society as a whole, it needs to be affordable – or completely free. It is a basic American right.

Higher education is potentially one of the best tools for social mobility in America. However, as it is set up now, it may only help the rich get richer. Why? Well, college is a great way for lower-income people to improve their economic situation—but they need to be able to afford it first.

Is college worth it for students who already start out at a disadvantage?  Let’s look at what students, especially from low-income areas, are up against when they choose post-secondary education today.

Is the future of higher education doomed?

In April 2014, education, corporate and philanthropic leaders from around the world who met in Essex, NY at a two-day Summit believed that many colleges will be unrecognizable in another decade and that unless millions more low-income students attain college degrees we face a global economic crisis.

Participating in the Summit were 60 individuals from China, Ireland, Great Britain, Canada, Germany, France and the United States representing a dozen colleges and universities, eight foundations, six corporations and 15 secondary schools, including executives from Google, The Bill & Melinda Gates Foundation, GE Foundation, Ernst & Young, University of Michigan, Harvard, Trinity College Dublin, Beijing Normal University, among others.

“Our outstanding participants included five lead speakers who framed the key issues surrounding college 2025. These speakers are futurists, experts in teaching and learning, recognized globally. We even had a 10-time Oscar winner,” said Rick Dalton, president and CEO of College For Every Student, the organization that sponsored the Summit with Trinity College Dublin.

Emerging Technology Trends

Dr. Nicholas Haan, a futurist from Singularity University in California, said, “We must leverage the exponential technology trends and the disruption that’s upon us to solve today’s inequalities and inefficiencies in education.”

Haan provided examples of the technology trends that will affect education in the near future, including Artificial Intelligence (AI) and robotics as well as Digital Manufacturing. He urged attendees to view challenges as problems that can be solved. “We need to throw out our old thinking and prepare ourselves for a world that is collaborative, ongoing and personalized.”

Lord David Puttnam of Queensgate, film producer, educationalist and Labour peer (UK), told summit participants, “Today’s students are embarking on a journey with no map. Today’s teachers are working in a scenario that has never been seen before – they are doing a job no one has ever been asked to do. They are becoming digital learners, interested in creating, sharing and delivering content with their students.”

Revolutionizing the Engine of Education

Paul Reville, former Massachusetts Secretary of Education and current professor at Harvard Graduate School of Education, said the “engine of education” should be re-configured, “We need to tackle the problem of differentiation, extend the entitlement of education and create a braided system that addresses – and includes – the challenges of social, physical and mental health services. A solution that focuses on instruction alone, simply will not work.”

Cliona Hannon, Director of Trinity Access Programmes (TAP) at Trinity College Dublin, said, “We are talking about developing innovative opportunities for low-income students. We need the talent of all young people engaged in civic society.”

The Recruiting Revolution

Dr. William Fitzsimmons, Harvard College’s Dean of Admissions, discussing the range of strategies and programs Harvard is undertaking to recruit low-income students and to support them once they’re enrolled, emphasizing “this is a human rights issue – it’s an outrage to waste the talent of these young people.”

From Harvard’s continued work on strengthening their financial aid structure, to actively recruiting low-income students in cities across the country, to creating and implementing student support programs, Fitzsimmons concluded “we can’t just bring students in and hope it works – it’s imperative we provide substantial support throughout.”

Professor Les Ebdon, Director of the Office of Fair Access in the UK, shared insights on his country’s approach to making fair access and participation a reality through its development of comprehensive access agreements.

Solutions to the Challenges

Leaders of the Summit will produce a white paper that delivers strategies to increase access and support for low-income students for College 2025.

“We know the devastating price of inequality, and we gathered to do something about it. There’s a better world out there for our children. A college degree is still the best path to a world of opportunity,” said Dalton of CFES.

Is college only for the elite?

Ironically, those who need to enter this “world of opportunity” most are least able to.

According to a report via the Times Higher Education, affluent children have a nearly 60 percent chance of “entering a highly selective university, compared with 27 percent for the less privileged group. The prospects of not entering any university were 8 percent and 27 percent, respectively.”

While this news isn’t necessarily new or surprising, it does continue to reaffirm a theory that higher education in the United States is not the model of equality that it really should be.

Student loan debt is a hot button issue now because it recently passed credit card and auto loan debt as the second-largest type of debt that Americans hold. Couple that news regarding debt to this report that suggests how tough it may be for less affluent children to enter America’s top colleges and it reveals flaws in our higher education systems.

The report also shows that no matter how higher education is structured in America and other countries, “affluent families will do whatever it takes to seek out qualitative advantages within the system that they face.”

In essence, rich kids still have a leg up. While this is not surprising, it is disheartening in a country that claims to be a land of equal opportunities.

As I have written about on my site, reorganizing how higher education impacts children who come from lesser backgrounds is paramount. Tuition growth will have to be restricted, the government will have to completely restructure Pell Grants and student loans, and America’s economy will have to continue to improve for these kids to have a chance to succeed.

Why the poor might not have access to a college education

It’s well-known how expensive post-secondary education is today. What is not as well-known is why.

Part of this is a lack of state investment in colleges and universities in recent years.

Only two states in the country are spending as much per student on higher ed funding as they did pre-recession, according to a report released by Young Invincibles. The nonprofit millennial advocacy group is pushing for debt-free higher ed funding and increased state involvement in helping young people obtain college degrees.

Between 2008-2014, North Dakota and Alaska were the only states to increase higher education spending, by 38 percent and 6 percent respectively. During this period every other state cut higher education funding, on average by 21 percent per student.

Why hasn’t higher education funding bounced back?

As the economy recovers, funding at the state level for colleges and universities has not bounced back. The reasons for these cutbacks vary based on state revenues, budget restrictions, and other factors. It seems that the decrease in investment is easier for policymakers to pass, as constituents are more likely to accept these types of cuts, versus more contentious moves like tax increases.

Though individuals may not overwhelmingly object to higher education budget cuts, they should. A direct impact can be seen in a family’s budget when these types of cuts are made. As states were decreasing their higher education funding, tuition and fees rose by 28 percent on average for two-year and four-year public universities, between 2008-2014. Tom Allison, Young Invincibles’ deputy director and author of the report tells MarketWatch, “The skyrocketing student debt we see is a symptom of a disease, and the disease we see is state disinvestment from higher education.”

The report clearly is not the first to draw a connection between states’ decreased investment in higher education and increasing tuition and growing student debt. However, Allison tells MarketWatch that arming residents with this type of information and how it directly affects their pocketbooks may encourage students, parents, and lawmakers to fight for better funding for higher education institutions.

Do students benefit from a “stable” higher education industry?

You might think that higher education is in trouble with everything that is going on within the industry. But surprisingly, the higher education industry is doing just fine.

According to Washingtonpost.com, Moody’s has officially upgraded the higher education industry to stable from negative.

“[T]he firm predicted that higher education will stabilize, for the first time post-recession, allowing more predictability in operating budgets. They upgraded the whole sector to “stable.””

The article lightly details why the rating was elevated and if it is sustainable.

Due to rising revenue because of growth in tuition and federal research funding, the industry has experienced stability, which is something higher education hasn’t been accustomed to since the start of Obama’s second term.

But that news isn’t necessarily grand for students. Tuition growth may be great for the industry as a whole because it decreases volatility, but rising college costs due to tuition increases have priced many students out of higher education.

Hopefully, the stability of the industry will lead to a reduction in how often colleges and universities are forced to raise tuition due to budget cuts and low funding from state legislatures.

But overall, this is good news. When higher education had a negative outlook, it was bad for all involved. An uptick in that outlook will surely help this arena in remaining stable and improving its standing in the coming years.

Answering the hard question: is college worth it anymore?

With all these factors that may benefit higher education, the government, the student loan industry, and everyone who is not a college student, it’s worth asking whether college is even worth going to anymore.

Many Americans definitely do not think so, and there is a lot of merit to that line of thought.

But the Obama Administration’s College Scorecard has a clearer, if counter-intuitive, insight.

The Obama Administration’s College Scorecard is kind of the gift that continues to give. It gives prospective students, and their parents, the ability to compare schools without having to fully visit too many colleges.

Another fantastic win from the scorecard is that we are provided with an idea of how well students do financially after they’ve graduated.

According to an article via Hamptonroads.com, the scorecard “tracks salaries ten years after the freshman year.” The good news? Student salaries used for the purpose of the article range from $34,000 to $56,000. The bad news? Salaries all depend on a student’s major.

But that’s not bad news as someone with a degree in finance is likely to make more than a student who chooses a career path in journalism.

The economy also plays a major role in determining one’s salary. Some companies constrict employment, increase employee production, and fail to produce salary increases because of how tight its bottom line becomes due to the state of the economy.

Even with those deciding factors, college graduates still make more than that of those with just high school diplomas. Most companies still prefer a college graduate compared to someone who just has a G.E.D. or high school diploma. A college degree won’t guarantee that you are wealthy, but it should help you live a more comfortable life than if you didn’t have it at all. That statistic isn’t likely to change anytime soon, and students should still strive for a college education to maximize their lifetime earning potential.

Now if we could just get the pursuit of those college degrees to be a little more affordable in the first place, we’d have something.

There are many ways to get there. Here are just a few suggestions.

Free college: a basic right or a privilege we can’t afford?

Earning a college education is something that is a double-edged sword for the nation’s youngest adults and some of their parents too. Society dictates that some form of secondary education is an absolute must for lifetime success but the cost associated with earning those credentials is debilitating. The Washington Post reports that the average college student will graduate with $25,000 in debt. With over $1 trillion in outstanding loans, student debt outweighs credit card debt and is exempt from bankruptcy protection.

Some may say this is just the cost of doing business and that a few years (or decades) of repaying student loans is worth the cost in the long run. If a person truly values his future, repaying loans and interest rates are just part of proving his dedication. To each his own, and other related monikers.

But what if that mentality were flipped? What if there was no cost to obtain a college education and it was viewed as a basic right, much like the K-12 public school system? With proponents such as 2016 Presidential hopeful Bernie Sanders, the conversation about free college is finally opening up in a major way.

It seems that the knee-jerk response is to claim that the nation can’t afford it. The trillion-dollar college education industry, coupled with the lending companies that “help” finance these endeavors, would feasibly go under if students did not have to find, earn or borrow the tens of thousands necessary to prove they care about their career.

Perhaps that’s true. But how would the economy as a whole look if college student debt disappeared? Instead of taking the first, low-paying job that came along to desperately find the cash to start repaying loans, maybe students would hold out for the perfect job where their talents and education could be best utilized. Instead of the nearly 22 million young adults living at home with their parents, maybe those kids would invest in their housing and start contributing to that industry faster. Parents who save every penny to pay for college would feasibly have more cash to put back into other aspects of the economy, strengthening whatever industries they touched.

When the facts are examined, it seems that the only ones truly benefitting from the current higher education model are the institutions themselves and the companies that support lending. In the second quarter of this year, private lender Sallie Mae reported $543 million in net income. In 2013 alone, Sallie Mae has spent over $1.2 million lobbying against legislation meant to relieve some of the college debt strain. Much like the skyrocketing healthcare industry costs over the past two decades, colleges and lenders have been left to their own devices with improper regulations.

The result is the “soaring college costs” we hear so much about today. According to the College Board in 1992 one year of college at a public four-year institution cost around $7,500 in today’s dollars. Now that cost is $10,000 higher. Private nonprofits cost around $17,000 in 1992; today the cost is nearly $24,000.  The cost of college is a runaway train at this point. College costs have risen faster than the inflation rate for decades.

While an economy hindrance, the high price tag of a college education has very little resistance when observing the nation’s population as a whole. Colleges and lending companies have, for the most part, gotten “a pass” because the pursuit of knowledge is deemed a worthy one where the price should never be considered an issue. Under the guise of a better-educated workforce, colleges and lenders have been able to get away with more than any other industry providing a basic, American service. What would the reaction be if utility costs rose that quickly, or the price of a gallon of milk?

For a college education to have the intended impact on the individual and society as a whole, it needs to be affordable – or completely free. It is a basic American right.

What if college can’t be free?

Perhaps a free college education is out of reach for America right now. However, an affordable one certainly shouldn’t be. At least, this is the hope of Presidential candidate Hillary Clinton.

Last year, she announced a plan that will tackle issues related to higher education.

“New College Compact” aims to tame the cost associated with attaining a college degree. She’s also looking to put a leash on student loan debt.

According to Brookings.edu, Clinton’s plan would make community colleges free.

“It vows to make enrollment at community colleges free and affordable without loans at four-year public institutions if students contribute the equivalent of wages from a 10-hour per-week job and families make the contribution prescribed by the aid eligibility formulas.”

Clinton is facing stiff competition from Bernie Sanders and will likely have to hold off a strong charge from Martin O’Malley. So releasing a progressive higher education plan surely works in her favor until it doesn’t.

While the plan sounds good on the surface, Clinton will have to tighten a few corners. HBCUs have serious concern over how free community college will impact their enrollment and financial aid.

She wants to reduce interest rates on student loans, but a Brookings study found that many students who reside in higher tax brackets hold a lot of the debt associated with student loans.

“Our prior analysis indicates that higher-income households hold a disproportionate share of student loan debt. The richest 25 percent of families hold 40 percent of the student loans, and would, therefore, receive roughly 40 percent of the benefits of a proposal that allowed all loan debt to be refinanced at lower rates.”

Still–even with that nugget of information, many low-income students who face high repayments or garnishment due to default would likely benefit from the proposal.

What would happen if schools stopped charging tuition?

Political activist Ralph Nader decided to run for president on the premise of being a consumer advocate and one who fights against keeping America from turning into an exclusive meritocracy.

It’s also why he wants his former school to do away with tuition

Nader graduated from the Harvard Law School in 1958 with a bachelor of law and thinks that the school isn’t doing enough to keep costs for student low.

Along with other activists, Nader is calling for Harvard University to use its endowment to eradicate tuition fees.

Boasting the largest endowment in the nation, Harvard has a fund of $36 billion and raised over $1 billion in 2015.

Simply put, Harvard isn’t hurting for dollars

Tapping into that income will not harm Harvard’s ability to fund other projects, like new buildings and paying for other fees, but it may set a precedent that other schools will be forced to follow.

Because Harvard’s endowment is so big–again, largest in the nation–it has the privilege that other schools may not harness.

Some in Congress are at least exploring the idea of potentially forcing some schools to use money from endowments towards tuition fees. The issue this presents is that many who decide to give to a school’s endowment usually do so for a certain cause or matter.

Former Harvard Business School student John Paulson gave the Harvard University School of Engineering and Applied Science a gift of $400 million in 2015. That money may be designated strictly for use at that school.

It’s also worth noting that these endowments are tax exempt and the policy may allow for schools like Harvard to run up the score.

Removing that exemption may not hurt Harvard, but it would damage other schools. For example, Grambling State University’s (GSU) endowment is only $4.5 million, and the school would be severely hurt if that money was taxed. GSU also has an alumni base that isn’t as financially strong as Harvard.

For the sake of rich and powerful schools, doing away with tuition fees would certainly help its students. But that rule should likely only apply to schools that can afford it, which means that no law or policy may be created to force schools to do so.

Are Income Share Agreements another option for college affordability?

What are Income Share Agreements (ISA)?

These will help students who take out loans to attain a degree that may be deemed worthless in the workplace. Often, they are saddled with massive amounts of debt that they are unable to pay back.

This causes many to default on their loans and fall down an income hole that detaches them from the ability to obtain credit to purchase a home, vehicle, etc…

Because it’s tough to section these students off–those who may be in danger of gaining a degree that’s economically barren–some may be eligible to take out an ISA loan.

These loans allow the student to pay back the cost of their degree regarding its value. So if one student has a degree that has little to no worth, he or she will have a small amount, if any, to repay.

Inversely, if a student’s degree turns out to be of much value, then that student will pay back more.

Ostensibly this seems like a good deal for students. It’s affordable, colleges and universities seem open to it, and Congress is exploring ways to create a regulatory environment for ISAs.

Hopefully, once properly researched and vetted, the application of these loans are a win for students as the cost of tuition and school fees continue to rise.

How to prevent an economic crisis by making college affordable again

Let’s be clear—there are many ways to peel a banana. Since there are many reasons higher education costs have skyrocketed over the past few decades, there are many solutions we can engage to manage these costs and lessen the burden on students.  We can make college totally free, or we can look for various ways to make college less expensive.

One thing seems to clear, though: students who are lower-income need to be able to find their way up…and it is becoming more and more difficult to do so. These days, a college degree is more necessary than ever. We need to make college cheaper and more accessible to lower-income students if we want a vibrant future for our economy.

Due to leaving their graduates with high debt loads, for-profit colleges are becoming the target of scrutiny from the federal government. But is this scrutiny justified?

Like many proponents of non-traditional pathways to college, Marco Rubio, a Republican presidential candidate for 2016, wants to expand the role that for-profit schools have in higher education.

According to USA Today, Rubio wrote an editorial for the National Review where he details why he believes the nation is better off if the education department changes the rules of accreditation for for-profit schools.

“These innovative providers cannot compete with the cartel of existing brick-and-mortar colleges and universities that dominate the accreditation process and shields our higher-education system from reform, competition, and accountability.”

Rubio is referring to how tough it is for for-profit colleges to attain accreditation. In changing the process, Rubio believes that it would allow for more for-profit schools to offer vocational training.

In doing so, far more Americans will be ready to attain gainful employment. In essence, Rubio wants “more welders and fewer philosophers.”

There’s a slight problem with Rubio’s argument. He’s receiving donations from the for-profit education industry. It’s not much as Rubio has taken in about $24,000 since 2014 according to opensecrets.org.

While the totals aren’t high, it supports the idea that Rubio only has this idea to appease a portion of his donation base.

But in addition to that, allowing more for-profit schools into the world of education without dealing with the problems that many have caused is not the best idea.

After all, the United States Education Department has been busy putting out their fires.

Rubio is right that students may need greater access to vocational institutions, but for-profit colleges may not be the best way to go. Here’s why.

For-Profit Colleges: Centers of Financial Ruin?

Unfortunately for those students looking for an affordable alternative to brick-and-mortar schools, online higher education options aren’t necessarily cheaper than the traditional brick-and-mortar schools, according to U.S. News and World Report,

The report attempts to “debunk” the myths surrounding the theory that online education may be a cheaper option for some students.

According to usnews.com, tuition costs for online courses, or degrees in some cases, are more expensive due to technology and faculty costs.

“Even if tuition for an online program looks appealingly low, students should be sure to look into whether they will be paying any additional fees, says Vickie Cook, director of the Center for Online Learning, Research, and Service at the University of Illinois—Springfield.”

Depending on the type of school the student chooses, the cost of attending varies. Selecting a private higher education institution that offers online programs will certainly trend higher than a public university with controlled costs.

Most importantly, many for-profit schools offer online programs. The costs associated with these programs and schools will sometimes rival that of some of the country’s best schools.

In fact, according to a new report by the Brookings Institute, a good chunk of student loan debt is held by students who attend for-profit institutions.

“The so-called student loan crisis in the U.S. is largely concentrated among non-traditional borrowers attending for-profit schools and other non-selective institutions, who have relatively weak educational outcomes and difficulty finding jobs after starting to repay their loans.”

Students who attend non-profit private schools or public universities do not face the same debt issue because their job prospects are much higher upon graduation.

Borrowers at for-profit institutions have a harder time finding gainful employment, and when they do, their average earnings barely creep over $20,000.

“[T]he median borrower from a for-profit institution who left school in 2011 and found a job in 2013 earned about $20,900—but over one in five (21 percent) were not employed; comparable community college borrowers earned $23,900, and almost one in six (17 percent) were not employed.”

The report also finds that students who attend the University of Phoenix hold the most debt. In 2014, students there held over $35 billion dollars in student loan debt.

College students work hard to make a better life for themselves and their families — but student loans can have the opposite effect, at least in the immediate. Tuition at these private schools is astronomical, and if students cannot find jobs to pay their loans back, attaining a degree from these schools is pointless.

Introducing the Corinthian 100

Some former graduates of these colleges are beginning to realize this.

Take Corinthian Colleges, for example. As reported by NPR, 107 of its students refused to pay back their student loans as a form of protest.

In addition to a large amount of debt that the students carried, they also claimed that the degrees they received from Corinthian are not recognized by most employers.

The Associated Press reported that Corinthian shut its doors at the end of April 2014 due to federal regulations. The college had more than 100 U.S. campuses with more than 70,000 students. But when enrollment started to slump and reports showed that nearly 100% of students at for-profit schools take out student loans to pay for their education, the United States Department of Education stepped in.

According to NPR, the Consumer Financial Protection Bureau met with representatives from the “Corinthian 100” to discuss “ways to address the burden of their student loans.” While this was likely a step in the right direction for those students, it didn’t fully address the student loan debt crisis that’s beginning to engulf higher education.

The Institute for College Access and Success by way of Pew Trusts shows that five states have an average debt for graduating students of more than $30,000. Consider that student loan debt now outpaces debt tied to mortgages and credit cards, and that more than 7 million U.S. borrowers are in default on their loans. Higher education just may be in crisis.

The Government Cracks Down

A couple of years ago, the U.S. Department of Education bumped up its regulation of for-profit career colleges, introducing rules meant to halt federal funding to institutions that leave students saddled with enormous debts that they are unable to repay.

The efforts by Obama’s administrations showed that federal and state authorities were ramping up their examination of the for-profit college industry, which included colleges such as the University of Phoenix and Everest College and ITT Technical Institute.

Opponents believe that many for-profit colleges charge a hefty price, yet target low-income consumers, resulting in students who have massive loans to repay and few job prospects.

U.S. Secretary Arne Duncan said, “Today too many of these programs fail to provide the training (students) need while burying them in debt they cannot repay.”

The for-profit college industry boomed during the Great Recession as colleges targeted the increasing number of unemployed Americans.

The Education Department’s new rules would penalize schools that cost their students too much debt compared to their earnings post-graduation. To be eligible for federal student loans and grants, schools must meet debt-to-income requirements for two out of three consecutive years.

The department estimated about 1,400 programs out of 5,500 covered by the regulations would fail the debt-to-income test.

Students at for-profit schools default on federal loans at a higher rate than students at traditional public colleges: over 19% after three years, compared with less than 13% at public institutions.

The government has continued with tightening regulations for colleges and universities. In 2015, the U.S. Department of Education released a list of 556 colleges and universities that were on a federal financial “watch list.” The Wall Street Journal reported that the Department of Education would have “increased financial oversight” into what these institutions of higher education do with the money they received from federal student aid.

On the list was a mixture of for-profit, public and Bible schools that were flagged because of accreditation, liabilities, and late financial statements. Nearly half of the institutions listed were for-profit schools such as the Art Institutes, Everest University, and Le Cordon Bleu. Many of the schools were already placed on this oversight list, but those names were previously not publicly released.

The Obama administration did more than put names of schools on lists, though.

Over the past year, they have forced schools to pay them for mishandling their funds

For example, in 2015, in what is perhaps the largest monetary settlement in higher education, Education Management Corporation (EMC) agreed to a $95.5 million settlement with the United States Justice Department. You probably know EDMC better by its school names: the Art Institutes, Argosy University, and Brown-Mackie College.

The lawsuit alleged, “that the company defrauded taxpayers out of billions of dollars.” The company is accused of admitting unqualified students and then encouraging them to receive federal and private loans to fund their educations.

Education Management Corporation continued to maintain its innocence and released a statement regarding the settlement.

In part that statement says:

“We are also pleased to have resolved the civil claims raised by the Department of Justice and state attorneys general. Though we continue to believe the allegations in the cases were without merit, putting these matters behind us returns our focus to educating students.”

A payout to the government of nearly $100 million, however, certainly sounds as if there was merit involved.

Education Management Corporation will continue to do business and enroll students. Because the company admitted no guilt, students who attended schools under the EDMC banner will likely be ineligible for debt relief.

Part of the settlement also includes over $100 in loan forgiveness for students who left EDMC after just 45 days of enrollment. All other students are still liable for any debt incurred while attending an EDMC institution.

While EDMC is still in business despite being accused of predatory practices, the Corinthian Colleges, mentioned earlier, shut down after being fined by the federal government.

According to Corinthian’s financial records, the institution received nearly 80% of its revenue from the federal government. Meaning the vast majority of its profit came from student loans.

The government began to investigate Corinthian because students claimed that the degrees they received weren’t being recognized by employers and they couldn’t find jobs. They also found that Corinthian was telling students to lie on their financial aid applications.

Soon after, Corinthian was fined $30 million by the federal government for “misrepresenting job placement rates,” effectively shutting the company down.

But does the government care about students?

The Corinthian 100 saga continues

Students who formerly attended Corinthian Colleges accused the United States Department of Education (USDOE) of using them as a publicity stunt.

Representatives from the “Corinthian 100” were set to meet with officials from the USDOE about their student loan debts. However, they opted to cancel the meeting because they felt they were being used.

According to the New Republic, a representative from the Debt Collective, the organization aiding the students in their quest against the USDOE, did not believe the government wanted to help.

“They’re using us so they can pretend to care about students.”

The Corinthian 100 continued to fight to get the government to forgive their student loan debt. Students that formerly attended schools under the now defunct Corinthian Colleges banner tried to exercise a clause listed in the contracts they signed for student loans.

That portion of the contract allowed for students to make a “defense of repayment” if they felt that they were deceived.

Once they found out that the federal government fined Corinthian $30 million, in part, for felonious ways of collecting debt, the 100 wanted their debt forgiven.

Students fight back—but is it enough?

According to chronicle.com, the Corinthian 100 had their debt forgiven.

“The department said…that it would discharge the debt of all students who attended one of Corinthian’s shuttered campuses after June 20, 2014, the day when the company essentially wrote its death sentence by agreeing to transfer ownership of the properties. Other Corinthian students will be eligible for loan forgiveness but to receive it, they must demonstrate that Corinthian violated state law.”

While some students likely felt some sense of relief, many students were left in the dust. After all, only some students would receive forgiveness. Others who feel that they’d been defrauded by Corinthian, as stated in the Chronicle of Higher Education’s article, would have to prove that the former institution of higher education violated state law.

The Department of Education would make the process of proving fraud by colleges and universities easier.

Still–this likely will not be enough to save every student defrauded by for-profit colleges. While it is great that many received the mercy of the United States Department of Education, the other students who borrowed in good faith with the belief that there would be a good education, a degree, and solid job opportunities on the back end are left hanging.

Giving blanket relief may not be in the department’s best intentions as it would open other doors that should remain closed. But giving special attention to the rest of Corinthian’s former students and giving them extra breathing room to either pay off the debt or taking on the vast majority of the debt is at least one way to help them in the long run.

For-Profit Schools Fight Back

Unsurprisingly, for-profit schools refused to take the new regulations and fines sitting down

In fact, the Association of Private Sector Colleges and Universities, a group that represents for-profit colleges, sued the U.S. Department of Education and Secretary Arne Duncan on behalf of for-profit colleges. For-profit colleges disagreed with the rules penalizing career training programs for charging high tuition that saddles students with massive debt while offering low-paying job prospects.

For-profit schools filed a lawsuit and asked a judge to reject the new regulation, claiming the Department of Education does not have the right to set debt-to-earning standards. The Association of Private Sector Colleges and Universities called the rule “unlawful, arbitrary, and irrational” and feels it will “needlessly harm millions of students who attend private sector colleges and universities.” They strong believe that the job a student lands and their earnings after graduation “depend heavily on factors beyond the schools’ control.”

The Education Department announced its “gainful employment” rules, which base a program’s ability to receive federal loans on whether the estimated annual loan payment of a typical graduate doesn’t exceed 8% of total earnings or 20% of the student’s discretionary income.

For-profit colleges were given time to make changes, but ultimately, if they failed to meet the standards, they would become ineligible for federal student aid. This made up nearly 90% of the revenue at for-profit schools.

And even more strangely, these institutions saw a steep rise in stock worth and revenue through 2014, when a lot of the regulatory changes began to take place. According to a CNN Money report, Strayer Education was perhaps the biggest success of the bunch. Strayer provides a variety of accreditation, bachelor degree, and master’s degree options through programs that are set up at 100 other colleges and universities across the country.  DeVry Education Group and Capella also saw rising stocks.

This was likely because more and more people are seeking out alternative forms of higher education, and that non-traditional students are more commonplace as a result. But what’s interesting about these numbers is that the schools are seeing financial strength despite heightened regulations from the government and the failures of Corinthian Colleges and other alternative schools.

Should For-Profit Schools Be Put to Death?

For-profit schools are singing a different tune these days

According to a survey by the Education Advisory Board, nearly 100% of executives at online higher education programs and schools want to shift their focus to “track career outcomes” for students once they leave school.

Before this change, many online higher ed schools were focused solely on gathering funding for new programs.

This news comes on the heels of the federal government tightening its grip on for-profit institutions and the funding they receive.

The EAB survey found that executives have concern over how employers view graduates and would like to “improve messaging to prospective students.”

Messaging and how online schools are viewed have taken a beating lately. With the Corinthian 100 refusing to repay their student loans because they were defrauded by Corinthian Colleges,  for-profit colleges have developed a sour reputation.

Potential students and graduates worry that their degrees are useless. While all online colleges aren’t seen in the same light, many are grouped together because the accreditation may differ from traditional colleges and universities. Standards for online schools, especially for-profit institutions with online programs, also vary and give many employers pause before hiring a graduate from an online university, specifically that from a for-profit.

The survey also found that some online higher ed institutions will add “digital badges” and “customization certificates.”

Conclusion

Focusing on the quality of education the students receive—rather than focus on securing funding for the government for questionable programs—will have a better long-term impact for students and these schools.

Truthfully, while I have come down pretty hard on for-profit schools, I do not think that they are inherently bad. I think that they can be part of an array of alternative options for students who choose not to go the traditional route.

However, historically, many for-profit institutions have engaged in predatory practices. Regulating them, as the federal government has been doing over the past few years, is the right way to go so that they can become great building blocks rather than destructive forces for a future career.

If it seems like college is more expensive than ever before—and with less return on investment than in previous generations—it’s not your imagination. Why is this happening? Find out in this chapter.

Consider this: today; a degree is a requirement for more entry-level jobs than before. This will be even truer in the future. In fact, according to the Committee for Economic Development, in 1965, just 11% of jobs required post-secondary training, but by 2020, 65% of U.S. jobs will require post-secondary training.

The problem is that those degrees are much more expensive than the degrees of ten or twenty years ago. This is even after taking inflation into account.

What’s happening? Are colleges inherently worth that much more than they have been in the past? While it’s true that the demand is higher, the truth is that there are many factors driving the costs of higher education in America. Here, you’ll see some of what’s going on behind the scenes. You will find out exactly what’s leading more students (and their parents) to take on hefty loans for a chance at success in life.

Is the federal government behind the rising cost of higher education?

According to Senator Elizabeth Warren, the answer is yes.

In 2015, she wrote a blistering letter to the Department of Education’s acting Education Secretary John King regarding how the department handles student loan fraud.

In the letter, Warren accuses the department of not having a proper handle on student loan contractors and specifically cites its relationship with Navient, formerly known as Sallie Mae.

In 2014, the Department of Education and Navient reached a settlement of $100 million due to Navient’s role in violating a federal law that pinches interest rates at 6% for service members.

Warren’s issue isn’t necessarily with the settlement; it’s that the department has failed to oversee its relationship with Navient.

As the company holds millions of student loans, the department’s relationship with Navient hasn’t been impacted even as the company was found to have broken the law.

Moving forward, Warren not only wants the department to reassess its position with Navient but wants to know why the company hasn’t been penalized further.

To put some fears to rest, the department launched an internal investigation into Navient’s loan practices and found that a small percentage of those who borrowed were not receiving the federally mandated rate.

Warren notes the Department of Education’s Inspector General revealed that the department’s internal investigation into Navient was flawed and erroneous.

Towards the end of the letter, Warren writes that the findings of an independent review of the department’s handling of student aid are that companies that are responsible for supervising student loan debt receive protection from the Department of Education when they break the law.

As students and former students grapple with how to pay back student loans and are harassed by the likes of companies like Navient, the information presented in Warren’s letter is damaging and sad.

If the Department of Education is indeed offering protection to companies that break the law and are failing to properly shelter students from these organizations, it proves why so many students have little faith in college affordability and the government’s role in helping them.

That’s not the only time Senator Warren has called out the Department of Education.

The Senator isn’t one to shy away from controversy, which is why it comes as no surprise that she’s railing against the United States Department of Education.

According to the New York Times, Warren held a press conference to talk about student loan debt and a system of “external checks” that would govern complaints against the department.

“We don’t trust a bank to handle its complaints, and we shouldn’t trust the federal student loan program to do it either,” Warren said according to the New York Times.

Warren criticized colleges and universities, the U.S. Department of Education, state legislatures, and more.

She said that outstanding student loan debt needs to be refinanced and that “college affordability and student debt” are issues that need to be included in the re-authorization of the Higher Education Act.

While Warren isn’t running for president, her words will likely resonate with voters on the left as she attempts to galvanize liberal and progressive voters ahead of the 2016 presidential election.

Her colleague in the Senate, Bernie Sanders, has an ambitious plan to regarding higher education, and that’s to make it free by taxing Wall Street.

Both lawmakers are talking about issues that many students and young Americans care about: making college more affordable or just making it free all together.

We’re likely pretty far off from giving away access to colleges and universities, but in the interim, the discussion surrounding the price of higher education and the debt that students carry is certainly worth having. We just need to ensure that the talk eventually turns into action that will help students.

Or could it be the state governments’ faults?

Former Education Secretary Arne Duncan in 2015 said that higher education in the United States needs more accountability and for schools to “deliver what they promise to students.”

According to the Washington Post, Duncan gave a speech at the University of Maryland Baltimore County where he made the calls for accountability and states to discontinue the “pattern of disinvestment.”

““[T]he widespread cutbacks that states have made in their higher education budgets desperately need to be reversed,” he said. “In all, 47 states cut per-student spending between 2009 and 2014, by an average of about 13 percent. Over the past 25 years, state per-student spending is down 25 percent, after adjusting for inflation! For each dollar states put in higher education today, the federal government invests more than two.”

Duncan, in essence, was saying that the federal government cannot continue to invest lost state dollars back into higher education because many states weren’t focusing on higher education as they should.

He also mentioned in the speech that changing the system, or the culture, will be tough to accomplish.

Duncan is correct in noting that the system will not change overnight.

What’s stopping change from happening? Let’s look more closely at what states prioritize today.

According to a report by the American Academy of Arts and Sciences, 11 states spend more money on correctional facilities than public research universities.

The report outlines how many states have cut spending on higher education while increasing budgets for jails and prisons.

Higher education spending didn’t start to fall once the recession started. Funding for higher education in many states begins toppling back in 1990 from 14.6 percent to just 9.4 percent in 2014.

Michigan, Oregon, Arizona, Vermont, Pennsylvania, New Hampshire, Delaware, Rhode Island, Massachusetts, Colorado, and Connecticut all failed to make the cut. Each state has a higher budget for jails and prisons than public research universities.

Adjusted for inflation, spending on elementary and secondary education increased by nearly 70 percent while corrections saw an increase of over 140 percent between 1986 and 2013.

In Michigan, nearly 25 percent of the state’s spending from general fund expenditures went towards corrections compared to just 15 percent on higher education.

The percentages are much closer in other states like Rhode Island and Delaware, but corrections spending still gets a larger percentage.

Oregon seems to be the worst defender. Less than 5 percent of general fund expenditures are dedicated to higher education, but the state spends nearly 15 percent of that money on correctional facilities.

The bottom line is that too many states invest in faux rehabilitation methods and not enough on student engagement. Imagine if we invested that money upfront in our troubled youth instead of putting it towards locking them up. It takes a fundamental understanding that it NEEDS to happen, though – something that is lacking in the U.S. education system.

Another cause for concern? Rising health care costs.

According to a study, there is a correlation between the rising cost of Medicaid and declined to spend on higher education. Created by Moody’s Analytics for The National Commission on Financing 21st Century Higher Education, the study suggests that state budgets will constrict spending on higher education because of the high cost of Medicaid.

Because money from the Affordable Care Act will start to slow by 2020, many states will have to allocate more funds for Medicaid, which in turn will cause a decrease in discretionary spending.

So, many states that are struggling with budget deficits or have deeply cut funding for higher education will likely face more financial issues.

The study portends that Medicaid will outrun state revenues. If that potential trend holds, then higher education truly is in trouble.

When colleges are the problem

For-profit schools have earned a reputation, and it’s not a favorable one, either.

For example, California Attorney General Kamala Harris filed a lawsuit against the company that operates the now-defunct for-profit Corinthian Colleges arguing that the organization left its students out to dry by saddling them with massive amounts of debt that many could not afford to pay back.

As a result, Corinthian Colleges Incorporated received a judgment against it of $1.17 billion to be paid to the State of California for illegal practices.

The school rewarded students with worthless degrees that many companies refused to recognize, leaving students without the ability to repay their exorbitant student loans.

So a California judge ruled for the state of California and ordered Corinthian Colleges Inc. to pay over $800 million in restitution to former students with the remaining amount going towards penalties.

This seems to be great news for students as they’ll have the ability to potentially receive some financial relief from student loans received while attending a Corinthian College.

But there may be a problem as Corinthian filed for bankruptcy last year, and by way of information from the company’s former attorney, Corinthian may not have to pay since it is no longer in operation.

No matter for the state and Harris, though, as her office has set up a website for students to visit to receive help and to gain information about the judgment.

Schools run by Corinthian Colleges Inc. operated under the umbrella of career colleges where students who wanted a college degree but didn’t have the time to absorb a traditional college schedule, could attend and receive a degree to help them receive better employment opportunities.

The company went after people of poor financial means and profited off of those individuals’ ability to receive student loans from the government and private lenders.

Corinthian likely received up to 90 percent of its funding from federal loan programs, so many of the schools were being fueled economically by the government and poor students.

Hopefully, students in California will be able to collect what was lost.

Corinthian Colleges is not the only school guilty for its mismanagement of funds.

In fact, more than 500 schools in the U.S. are among colleges being investigated. According to Insidehighered.com, the United States Department of Education is “closely monitoring a greater number of colleges and universities over concerns about their management of federal funds…”

Many of the schools on the list of potential colleges being investigated are “for-profit beauty and cosmetology schools.” These types of institutions have come under increased fire for their collection of federal funds to allow students to enroll. But many students at some for-profit schools have complained that their degrees are worthless and that they are left saddled with piles of student loan debt and no gainful employment to show for it. That, to me, is certainly cause for colleges to be investigated by the U.S. Department of Education.

Other for-profit schools listed include ITT Technical Institute, The Art Institutes, and South University.

For-profit schools aren’t languishing alone on this list, though. Cheyney University, a Historically Black College and University (HBCU), was placed on the department’s “most stringent form of monitoring over concerns with the institution’s ‘administrative capability.’”

Cheyney has faced financial trouble as of late due to a rise in deficits, a decrease in enrollment and a campus that is falling apart. That institutional erosion is due in part to moves made by Cheyney’s administration.

Students at any institution on the list of colleges being investigated may want to monitor the progress of the list as schools are removed or added periodically. This shows that the Department of Education is serious about ensuring that the education of students at these types of schools isn’t wasted on loans and empty job guarantees. It’s important that predatory institutions that do not implement the proper job placement and degree-use policies are called out, and if necessary, shut down.

Finally, it’s worth noting that schools need to be accountable not just for managing their funds, but for ensuring that their students finish school.

There are a lot of metrics in place to measure the effectiveness of P-12 schooling in the U.S.  Stats shine a particularly bright light on public schools, particularly when they are failing students. Dropout rates are just one of the factors taken into account when these numbers are calculated and tend to weigh heavily on the schools and districts who have low percentages.

However, the same does not seem to be true once the high school years pass. Compared to P-12 institutions, colleges and universities seemingly get a pass when it comes to dropout rates – perhaps because in the past, higher education was considered more of a privilege and less of a right. A college dropout was simply walking away from the assumed higher quality of life that came with the degree but still had opportunity to excel without it

That’s not the case anymore. As of 2013, 17.5 million students were enrolled in U.S. colleges and universities.  More than ever, colleges and universities have a responsibility to not simply admit students, but ensure they are guided properly to graduation. In other words, institutions of higher education should not be able to just take their student’s money and say “good luck.” They should provide the tools necessary for students to successfully achieve a college education and anticipate the issues that could prevent that.

Authors Ben Miller and Phuong Ly discussed the issue of the U.S. colleges with the worst graduation rates in their book College Dropout Factories. Within the pages, the authors encouraged educators at all levels to acknowledge that colleges and universities should share responsibility for successful or failing graduation rates and that the institutions with the worst rates should be shut down. Perhaps the most terrifying suggestion in the book (for colleges and universities) was that public institutions with low graduation rates would be subjected to reduced state funding.

The book was written based on findings from Washington Monthly that ranked the U.S. schools with the lowest six-year graduation rates among colleges and universities, including public ones like the University of the District of Columbia (8%), Haskell Indian Nations University (9%), Oglala Lakota College (11%), Texas Southern University (13%) and Chicago State University (13%). These stats were published in 2010, so they are not the most current available but a quick scan of the University of the District Columbia’s official page shows graduation rate numbers through the end of the 2003 – 2004 school year. The past nine years are nowhere to be found. The school boasts 51.2 percent underrepresented minorities in the study body, including 47 percent that are Black – but what good are those numbers if these students are not benefitting from their time in college because they receive no degree?

In the case of Chicago State University, the latest statistics show some improvement from the 2010 ones. The six-year graduation rate is up to 21 percent – but the transfer-out rate is nearly 30 percent. The school has 92 percent underrepresented minorities that attend – 86 percent who are black and 70 percent who are female – but again, what good does any of that do if these traditionally disadvantaged students are not graduating?

In all cases of college dropout factories, the P-12 institutions chalk up a victory on their end. They graduated the students and also saw them accepted into a college. What happens after that is between the students and their higher education choices.

This, to me, is a problem. The accountability for student success extends beyond the years that they are in P-12 classrooms. Graduation from high school, and acceptance into college, should never be the final goal of P-12 educators. That is not a victory. That is only halftime.

As far as the colleges and universities are concerned, higher accountability should be demanded from educators, students, parents and any Americans that want the best economy and highest-educated population. Public institutions, in particular, should be subject to restructuring or take over if dropout rates are too high. The lack of delivery on the college degree dream at many of these schools is appalling, frankly, and has gone on long enough.

They’re all making it worse

Evidently, it’s not just one person or one group causing all the issues.  This is a multifaceted problem…and it is one that will, unfortunately, price a lot of lower-income people out of their number one ticket for social mobility in America. It will be a shame if we cannot figure out how to fix a broken system.