Opinion

College: Worth the Cost?

financial-playbook-and-impact-on-loansAl Perez is the son of Cuban immigrants who is graduating from the University of Miami in the spring of 2016. Rather than feeling the excitement that comes with being immersed into the real world, Perez is worried about how he is going to pay off his student loans. On graduation day Perez will leave college with a little over $25,000 of debt, which is now more than double the amount of the average debt twenty years ago. For many students entering college, their biggest concern is not the workload or adjustment, but rather the means of paying for it. This is concerning. According to US News and World Report, students in the United States currently owe over $1.2 trillion in student loans (Hechinger 1). Nearly 20% of the students who take out these loans are behind in their payments and are accruing more debt than they originally owed (Hechinger 1). This constant compilation of student debt has made students and their families wonder: Is college a good investment? Rather than continuing to discourage students from attending college because of its high cost or forcing students to take on exorbitant amounts of debt, we should, as Marco Rubio suggests, find innovative ways to make education more affordable through various programs such as investments and trade schools.

College student loans are getting out of control and have emerged as a hot topic for the 2016 presidential election. One of the biggest points of contention in this election has been Bernie Sanders’ plan to make public college free, but is this really the best solution? Much of this election cycle will hinge on the vote of the millennials, bringing the debate over college debt onto center stage. There is no doubt that education is an important part of our society, but the purpose of education is what students must understand when making the investment. The goal of education is not just to develop intelligent people, but, more importantly, to develop good citizens. The question will come down to what sorts of policies and programs each candidate can put forward that will make college a good investment again.

The goal of education is not just to develop intelligent people, but, more importantly, to develop good citizens.

The financial and academic investments of college go hand-in-hand. Many students arrive at college to study a random subject with no direction, which ends up putting them at a disadvantage as they are wasting time and money. When students chooses to pursue a higher education, they are making one of the biggest investments of their lives, often times only second to a future investment in their very own home. When a student makes the decision as to what they are going to study in college, it is hard for them to allow only their passion to guide them. Instead, when a student does decide what to study, they must understand what they are going to get out of their studies and how much money they’ll make in a subsequent career. In Marco Rubio’s book American Dreams, he sums this up perfectly when he says, “We no longer live in an economy in which most young people have the luxury of going deep into debt for an education that prepares them for an entry-level job at Starbucks,” (Rubio 91). As Rubio suggests, while studying what you want in college sounds nice, the high cost of college means that students should study a subject that they not only enjoy, but, more importantly, a subject that will help prepare them for a career, providing them financial stability.

Other first year college students like myself know how the financial burden of college is something that is always on our minds. What if our country could come up with innovative ways to pay for college? What if students had the ability to pay for college without racking up excess amounts of debt? With a country full of innovators, students applying to college should have these sorts of options. Senator Marco Rubio has brought about solutions that include making paying for college into an investment process.  Beginning with his plan to help students make the proper investment in college, Rubio has put forth ideas that not only allow students to know what type of education they are investing in, but also helps them find ways to pay for it.

Marco Rubio is the son of Cuban immigrants who came to this country with nothing but the clothes on their backs. Escaping the corrupt Cuban regime, they came to the city of Miami hoping to build a new life and start a family. Rubio began playing college football at Taiko College in Missouri, then after two years transferred to Santa Fe Community College in Gainesville, Florida. He ended his undergraduate career at University of Florida, and then went onto law school at the University of Miami. Like Al, when Rubio left school at the University of Miami in 1996, he had racked up $100,000 in student debt. When the student loan bills began piling in, Rubio chose to defer them, which meant he agreed to pay them at a later time with one major consequence: an interest charge. Rubio climbed the political ladder for years before being able to pay off his loans, which eventually became his single biggest personal expense. Even when Rubio entered the Senate in 2010, he still owed over $100,000, and it wasn’t until 2012 with the publishing of his book An American Son that he was able to repay his loans. Innovative ways to diminish the cost of college education could have helped Rubio avoid the large amount of debt he acquired (Rubio 94).

Millions of people throughout our country from age twenty to fifty have experienced similar situations. Our current system forces students to enter the workplace at an extreme disadvantage, often times already in thousands of dollars of debt. A hybrid of our current business investment system and the college scholarship process will allow for an appropriate balance allowing students to be successful and better prepared for employment. My view for which options students are offered to pay for college is very much aligned with those of ex-presidential candidate Marco Rubio. Rubio lays out his plan in his book American Dreams. The main component of his program would be investments. A hybrid of our current business investment system and the college scholarship process will allow for an appropriate balance allowing students to be successful and better prepared for employment. Rubio’s stance on investments in education came from David Bowie who sold shares of his album prior to its release. In doing so he raised enough money to complete the creation of his album, and in return he provided investors with shares of his future revenue (Rubio 96). The program would allow students to automatically be enrolled in a payment program based on their salary right after graduation. Students would have the ability to apply for a “Student Investment Plan” that would give private companies the ability to invest in a student’s education (Rubio 95). How does this actually work though? Say you need a $40,000 loan to pay for a year of college. The student would apply to one of the student investment plans, and then if the company decided to “invest”, a set percentage of your income would be set for you to pay out over a certain number of years. For example if the company investing in you sets your deduction at 5% over ten years, you would be required to pay out that set fee over that time period to the company that invested in your education.

If the portion of the salary the individual is paid is greater than the amount the company invested, they will make a profit, but, if it is not, then the companies lose the money they invested. This aspect forces the company to ensure they are investing in the proper candidate, which would require the implementation of a process similar to the college application process. This process is different from student loans, because in this program a student would not be required to pay the entire amount that the company invests. Their only obligation would be to pay back the percentage the company sets. So if you had that set rate of 5% over ten years, you would only be required to pay that amount, regardless if you make enough money to pay back the original investment. Similar to investing, companies will have to take the risks on students, hoping they will provide them with some sort of profit.

Allowing students to try and “sell” themselves to investors is a skill that would be beneficial for them as they get closer to employment where they will have to sell themselves to employers to get jobs and money. When a company wants to invest in a student, they can look at various things from their grades to their major to even their extracurricular interests, then make an investment in the student if they feel like they will get a good job and be able to provide a profit.

As companies become more concerned with making a profit, they can delve into various new means of education to allow them to earn an increased profit. New institutions such as a trade school could play a vital role in saving students time and money. The way our current society is set up, we are encouraging students to rack up high amounts of debt to pursue degrees they may not even be interested in or necessarily be qualified in. A survey produced by Gallup found that a concerning “96 percent of college and university officials were confident that their institution was preparing students for the modern workforce, just 11 percent of business leaders strongly agree,” (Rubio 100). Companies such as Caterpillar, BMW, and IBM have developed programs that would allow for students to be trained to the standards of the specific workplace they desire to work in (Rubio 100). A trade school will prevent students from going to school and wasting valuable time and money for something they may not even enjoy or be cut out for. A more practical education such as this would also help boost industry and improve our force of skilled workers.

Take Al for example. If going into college he had been presented the opportunity to begin training to work in technology, leading to a job at IBM, he would have more likely allowed himself to become much more educated in his field, giving him the ability to climb the corporate ladder faster, ultimately allowing him to pay off his college loans soon after he left college. This sort of plan is another our country could add to a list of innovative ideas to make college a good investment for students once again.

Not all candidates believe that the path to college affordability should go through the private sector. Presidential candidate Bernie Sanders believes that the government should provide every student with the option to attend state colleges free of charge. But how will this work? Sanders believes that public colleges should be run the same way as public schools. While this sounds good in theory, many of Sanders’ predictions for this program are based on projections he has made based on college tuitions, estimating that the total cost of his plan is around $75 billion dollars (Jorstad 1). While Sanders’ campaign may like to think this number of $75 billion is a definite number, he hasn’t taken into account the fact that “students are paying 3.22 times more than in 1985,” and tuition prices are still continuing to rise each year (Jorstad 1).

Another aspect that Sanders’ camp overlooks is the fact that a majority of what you pay to attend a public college are fees such as room and board as well as other various living costs. In a report published by the College Board, they show that the average tuition cost for a public college is around $9,000, while the room and board costs are around $11,000 (Jorstad 1). On top of that, students on average pay $1,200 for texts each year (Jorstad 1). How are students who can’t afford these other aspects of college payments going to pay for this? They are going to have to take out student loans.While the idea of free college sounds like a great one, it is not a logical one. Because Sanders’ plan only covers college tuition, he will be leaving all room and board, textbooks, and other living costs for students to try and afford. While the idea of free college sounds like a great one, it is not a logical one. The way Sanders’ camp has outlined the costs for each aspect have not taken into account how prices waver and how some are left out of basic tuition costs completely.

Another big talking point for Sanders is that since countries in Europe, often citing Germany, are doing it, the United States should be able to do it too. What Sanders does not take into consideration is the fact that the German education system is setup to allow for students to begin studying a concentration as early as age ten. This is vastly different than the US education system (Stooksberry 1). Sanders goes on to refer to various other European countries such as Sweden, Finland, and Norway, whose tuition is free. This talking point sounds legitimate, but one must take into consideration these countries’ high tax rates, population makeup, and sizes (Stooksberry 1). If you were to combine the three populations of these countries, it would not come close to equaling the population of the whole state of California. How can we possibly think that three separate countries not even the size of California combined, can have a system that would work for a country as expansive as the United States? That’s right, we cannot. Although Sanders’ idea of free college may sound enticing, he has yet to release what costs will be covered in his plan, not to mention he has not even logistically thought through how this plan would be implemented.

While Sanders’ plan of free college is what all students would love, Marco Rubio puts forth a plan that is logistical and innovative. In the case of Al, Rubio’s program would allow him to have an alternative to automatically racking up student loan debt when leaving college. Our society runs on businesses, and it needs businesses to survive. Instituting various business concepts into paying for college allows us to fix a problem with a familiar solution. The ideas of Student Investment Plans and trade schools are new ideas that allow for college to become a better and more economical investment. While these plans will not fully get rid of college loans, they are a good place to start and will form the foundation for future programs to continue to make education both more affordable and effective in America.

Paying for college is something that many students struggle with, and that is why our country needs new and innovative ideas like Rubio’s to revolutionize the system. In the case of Al, he is a student that is more concerned with how he will pay for his skills rather than how he will apply them. Like Al, many Americans live one small problem away from a financial collapse because of their high amount of student debt. As a country we say we have the best education system in the world, but how can we say that when a chunk of our population is scared to make the investment? In the words of Rubio, “The fight for a quality higher education for all is the fight for the American Dream itself. At stake is the security of millions of families and the future of millions of young lives,” (Rubio 106). The American Dream is fading, and making education affordable for all will help restore one of the most unique features of our great country.

Sources for this article: 

Baum, Sandy, and Martha Johnson. “Student Debt: Who Borrows Most? What Lies Ahead?” Student Debt: Who Borrows Most? What Lies Ahead? Urban Institute, 20 Apr. 2015. Web. 31 Mar. 2016.

Hechinger Report. “Heaviest College Debt Fall on 3 Types of Students.” US News. U.S.News & World Report, 8 July 2015. Web. 31 Mar. 2016.

Jorstad, Kyle. “COMMENTARY: Sanders’ College Plan Is Illogical.”Courier-Post. USA Today, 8 Feb. 2016. Web. 31 Mar. 2016.

Rubio, Marco. American Dreams: Restoring Economic Opportunity for Everyone. Vol. 1. New York: Sentinel, 2015. Print.

Stooksberry, Jay. “Why Bernie’s ‘Free College’ Plan Is Mostly Fantasy – IVN.us.” IVNus. IVN, 02 Mar. 2016. Web. 31 Mar. 2016.

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