Robert W. Glover, University of Maine
At college campuses across Maine and the nation, students are heading back to school. This is an electrifying time to be at a college or university, as the returning students bring excitement, enthusiasm, intellectual curiosity, and energy. But for many students, that excitement is coupled with anxiety about costs of education and the debt they are increasingly falling into as they seek a college degree.
For a state like Maine, struggling to maintain a dynamic labor force and a robust economy as its population ages, this is a critical issue that merits swift and common sense policy solutions. Sadly, we’re not getting such solutions from political leaders like Bruce Poliquin.
If we want to keep our younger populations here, ensuring that college remains affordable and that their debt burden remains manageable is one of the most important steps we can take.
Let’s start with the basics. Higher education has traditionally been a key means for Americans to improve their social and economic position. Even with rising costs and increasing debt burdens, this remains the case. The chart below from the non-partisan Pew Research Center shows the difference in expected annual earnings for those holding a four-year college degree relative to two-year degrees or high school education, a gap that is growing.
Yet many college students struggle to finance their college education. Costs have increased while wages remain stagnant and investments in higher education from the government, such as the Federal Pell Grant or state funding for public universities, have skidded to halt or declined.
A recent article suggests that while in 1980, it was possible to work a typical full-time summer job and pay for the cost of one’s education at a four-year public university with a little spending money left over, that is no longer the case. Today, to pay for one’s education at that same four-year public university, a student would have to work 20 hours a day for three straight months, i.e. something that is virtually impossible. It’s no surprise then that many students resort to funding their education through loans.
The grim numbers on student debt bear that out. According to the Project on Student Debt, roughly 70% of graduating seniors now graduate with an average of $28,400 in student debt. Total student debt in the United States now tops $1.2 trillion, a number sufficiently large enough to lead some to say that it could impact the overall financial health of the American economy.
And this is particularly problematic for Maine. We are all aware of the “demographic winter” we face as a state, with a disproportionately older population and all that this implies—fewer tax revenues, greater demands on state services, a smaller, less dynamic workforce, shrinking school-age populations, declining home sales, and a litany of other challenges.
Students emerging from colleges and universities under this dark cloud of debt are hypersensitive to keeping costs of living as low as possible while they attempt to get a handle on their finances. They are looking for high-paying jobs, low-cost quality housing, and ways to cut costs wherever possible (particularly with regard to housing and transportation). As I’ve written elsewhere, part of ensuring that our young people stay here after graduation entails attending to these important policy issues.
However, we must also address the complex issue of college affordability and student debt head on—expanding federal investments in education like the Pell Grant, or state-based initiatives like Opportunity Maine. Thus, it’s disheartening to see Representative Bruce Poliquin pushing to freeze Pell Grant spending at its current rate for ten years—a position that will lead to more crushing student debt on young Mainers and likely an even harsher “demographic winter.”
Maine’s Democrats deserve credit for bringing this issue to the forefront of what is likely to be a contentious upcoming Congressional campaign and for leading on recent efforts to expand the Opportunity Maine tax credit.
We must fight efforts to turn higher education into a prolonged form of indentured servitude for our young people, and an economic windfall for banks and financiers. And if we care about keeping young people here in Maine, our starting point should be ensuring that they do not begin their professional lives trudging up a mountain of debt.