The higher education tax on working families

Over the course of the Democratic presidential primary campaign, Bernie Sanders and Hillary Clinton have elevated the issue of the ever-growing cost of college. They have sparred over how to make higher education more accessible to low-income students, and whether higher education should be universally free or simply guarantee that students can attend without incurring debt.

What has gone somewhat understated during the course of the debate is the full severity of the burden that exorbitant college tuition imposes not just on today’s students and recent graduates, but on all American working families. And this burden isn’t just a temporary hit around college years, but in fact dogs families for most of their working lives.

First, some background numbers: The average cost of a four-year degree with room and board at an in-state public college is now nearly $80,000. For a private college, it’s more than $130,000—and many elite colleges are much more. As tuition rises, each college graduating class becomes the most highly indebted in history. In the class of 2015, for example, 71 percent of students graduated with debt, carrying an average student debt load of $35,000.

This staggering debt load tells us several things. Most obviously, it imposes an immediate financial burden on young people as soon as they hit the workforce. It they’re lucky, they will have six months to begin repaying their loans. But the weight of these loans causes more and more young people to defer purchases of cars and homes, and likely delays them from marriage and having children.

But it also means that families cannot keep up with the rising cost of college. It’s absurd to expect the average American family to finance some $100,000 (and growing) in education for each of their children during a time when median incomes have been stagnant for generations and economic insecurity has only deepened. But both social norms and federal financial aid policy ingrain an expectation that most families will contribute some of the cost of college, and that families should save early and often for their children’s degrees.

Yet four out of five Americans now experience a bout of unemployment or other economic hardship at some point during their careers. During hard times, many families face little choice but to dip into their college savings just to get by. Students are left taking on more debt, and families are helpless to prevent it because, despite their best efforts, years of hard savings can be wiped away by an economic downturn that costs them their job.

So let’s follow a 2015 college graduate through the course of her working life. On a standard repayment plan, she’ll need ten years to repay her student loans, finally paying off her education when she’s in her early thirties. She’ll then likely soon need to begin saving for her own children’s college education, in the hopes of relieving them from a debt load like her own. But there’s an eighty percent chance that her and her spouse fall into joblessness at some point, and the family may have to spend money saved for college to cover basic expenses. This causes her children to take on more student loans than they would otherwise, graduating with higher debt, and the cycle repeats.

All told, the unbearable cost of college imposes a perpetual education tax on working families. First, they spend a decade or more paying off their own debt; then they spend the following decade or two saving, often in vain, for their own children’s education.

And this is truly a tax, as government has systematically disinvested in higher education for thirty years. As states reduce financing for public colleges, the cost of attendance is shifted on to the backs of working families and students.

We can argue about how to fix this—about whether college should be free for all or should be means-tested and guaranteed debt-free. The escalating cost of college resembles the struggle to contain healthcare costs, so perhaps similar reforms are needed to control college costs.

But one thing is certain: The burdens of the current system are unsustainable for a healthy economy. Higher education has become a necessary credential to have a shot at a decent middle-class life, but we’ve made affording that credential an exhausting, depleting ordeal for millions of families.

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