The student debt load has widened the “wealth gap,” and that’s bad news for more than just the people who graduate from college saddled with years or even decades of college loans. But it’s a problem we can fix, if the nation and its politicians are committed to strengthening our economic future.
Unlike other forms of debt, which Americans worked to pay down during the recession, student loan debt increased. That is largely due to a combination of stagnating or falling family income and higher tuition and fees, some of it necessitated by deep cuts in state budgets.
Why is that such a problem? The wealth gap isn’t just the broad chasm that separates the rich and poor, but the gap between the rich and everyone else. The U.S. economy was built on a strong middle class, but all signs point to a shrinking middle. If more household income is eaten up paying off tens of thousands of dollars in student loans, less is available to help support a consumer-driven economy.
As the Associated Press story also noted, graduates who spend years paying off their loans are more likely to delay contributing to their own retirement funds. That could have heavy implications for the future, when these graduates reach retirement age but lack the income necessary to sustain them in their golden years.
President Obama has made college affordability a key policy point, but it is something that all Americans should be concerned about.
North Carolina’s constitution stipulates that admission to state universities should be free, “as far as practicable.” Its writers understood that education is not an expense, but an investment that will pay dividends throughout a graduate’s working years. Over the years our Honorables have taken that constitutional mandate as an unworkable suggestion. More recently, budget cuts have gone beyond belt-tightening.
Our state universities, including UNC-Charlotte, typically rank among the most affordable, but as middle-class incomes have stagnated, the reality is that each tuition increase prices more students out of a college education Not everyone can go to Harvard, nor should they. But as a nation trying to compete in the global marketplace, it is in our best interest to help students who have the ability, desire and motivation to further their education do so without amassing a pile of debt.
That can be done many ways, including enhancing and expanding early-college programs that allow students to graduate with some college credit or the skills to get a job that offers long-term potential. Community colleges, especially in North Carolina, have a strong track record of placing graduates in the jobs available in their area, but they also offer an affordable option for university-bound students to get required courses out of the way.
Programs such as UNC-Chapel Hill’s “Carolina Covenant” help qualified low-income students graduate without debt, through a combination of scholarships, grants and work-study assignments. More options for middle-income families, who often fall through the cracks because they make too much for financial aid but cannot afford full tuition costs, would pay off by allowing graduates to begin saving for retirement and invest in their own futures.
In return, we must expect from them the best they have to give – good grades, strong work ethic and a desire to contribute through work-study or part-time jobs. We don’t want to carry someone who isn’t willing to put in the time or effort required to successfully complete a college course of study, but we should realize that allowing students to graduate with mountains of debt hurts our economy as well as the individuals who may take years or even decades to pay off their college expenses.
A version of this editorial originally appeared in The Wilmington Star-News, a Halifax Media Group newspaper.