Does anyone think it would be good public policy if we stopped public funding of high schools? After eighth grade we would require all parents and high school students to pay to get a high school diploma.
But it is generally accepted that a high school diploma for our grandparents was the equivalent of a community college, technical school, or four-year college degree in today’s economy. The gap between a high school diploma and a college degree in job prospects and income level is widening. Success in life, in America and in the global economy, is more and more tied to a post-secondary degree.
Why then do we continue to insist that such degrees, whether it be community college, a technical school, or college, is up to the student? The requirement of students and parents to fund higher education not only continues, but that cost continues to rise. Tuition costs continue to increase higher than the rate of inflation. One suspects lottery scholarships, legislatures reducing funding, and the ease of getting a college loan has contributed to higher tuition costs.
The result has been a generation of college graduates carrying staggering debt. It’s over a trillion dollars and it matches credit card debt in America. And the loans are immune from bankruptcy laws.
What effect does this have on the economy?
The stubborn recession continues. Consumer spending usually leads us out of recession.
Who drives the economy? People my age, that own a home, don’t need a new car, and our only shopping trips are to Food City and Kroger? Or the younger generation, getting out of school, getting a good job, and then buying a house or renting an apartment and buying furniture, appliances, and carpeting? Buying a new car. Having children.
How many college graduate couples today can do those things while carrying staggering student loans in a sluggish economy? Married couples may be carrying a double dose of these loans.
How many college graduates, or college students, are living with their parents and have just enough money to pay their cell phone bill and their college loan payment?
What effect on the economy would there be if this generation of young people had their college loans forgiven?
Which would have a greater impact on driving consumer demand and a resurgence in the economy: giving hundreds of millions of dollars to the banks, or forgiving student loans?
The stimulus bill hardly made a dent in the recession; much of it used by local and state governments to maintain the status quo.
Imagine what effect there would have been on the economy if the hundreds of millions of dollars sent to state governments and the banks had instead gone to help homeowners facing foreclosures, or student debt.
In other words, the failure of the government to deal with this recession comes down to money being spent in the wrong place. Top down, trickle down if you will, measures. This was done by Democrats and Republicans.
The banks might have been better off if the homeowners got the money and made mortgage payments rather than the bank in possession of houses they can’t sell. Retailers would have been boosted by help with student loans.
If Congress decides to do another stimulus bill, though it doesn’t look likely in the short term, they need to try sending the money out to the grassroots and let it come back to the banks, major retailers, home builders, and the car companies.
But the first priority should be to help the next generation get off to a good start free of a financial handicap that can plague them for years to come.
The Tennessee legislature could start by increasing funding for community colleges and technical schools and require a corresponding reduction in tuition. It would be a place to start in helping our young people get a better start in life.