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School’s Out

Welcome to College—and a Lifetime of Debt

College is unaffordable for millions. It’s time to rethink higher education.

For millions of students, the global pandemic fundamentally altered one of the most important questions many young people face: Is going to college worth the cost? Suddenly without the dorms, dining halls, and larger “college experience,” a few hours of remote instruction spent tucked away in their childhood home looked different. Even after colleges and universities opened their doors again, the doubt persisted. After years of skyrocketing expenses, many had hit a breaking point, questioning not just whether a degree was worth what is, for some, decades in debt, but also what it is we pay for when we pay for a college education.

The high cost of higher ed has long been rationalized as a down payment on a better future, an investment in skills that will translate into over a million dollars in additional lifetime earnings when compared to those with only a high school diploma. But as the return on investment declines, many young people are no longer buying that story. Today, a majority of Americans—56 percent, according to a March survey from The Wall Street Journal—believe college is no longer worth the price. And yet, American policies and politics remain stuck in an era when a year of college cost a fraction of what it does today.

Every year, millions of students decide to take out a mortgage on their futures because they believe it is the price they have to pay to access a plethora of jobs that would otherwise be inaccessible. These are jobs that include “perks” like health care, paid time off, and—if you’re lucky—retirement benefits. Today, the average price of admission to this workforce is more than $37,000 a year—for four years. A degree, of course, doesn’t guarantee one of these jobs. But it is necessary to be considered for many of them.

Higher education has long been treated as a placebo for deep inequalities, even as it has rapidly grown more unaffordable. It is, in many ways, emblematic of America’s hyper-individualism and resistance toward solving structural problems: Hard work—in the form of studying, winning prizes and scholarships, and grinding through challenging subjects—could lift anyone out of poverty. This line of thinking conveniently blames low earners without college degrees for their predicament and implicitly provides an argument against expanding the welfare state or raising the minimum wage.

As the cost of college soared, many still clung on to the promise that the price was self-evidently worth it—even as tuition outpaced inflation several times over. Pointing to a 14 percent annual rate of return calculated by the Federal Reserve, Princeton University’s president wrote in April that “it is hard to conceive of a more reliable and cost-effective investment than attending and completing college.” His op-ed for The Washington Post failed to mention that this figure, by the Fed’s own admission, has declined in recent years because of rising tuition.

Today, there’s growing recognition that this system isn’t only broken, it’s rigged in favor of the wealthy. A 2022 federal lawsuit brought against 17 of the country’s most elite universities, including Yale, Columbia, and MIT, is litigating as much.

These universities were allowed to form a consensus on how financial aid packages were determined, thanks to a federal antitrust law signed by Bill Clinton in 1994. Under the auspices of the Improving America’s Schools Act, these schools claimed they were exempt from antitrust laws because they practiced “need-blind admissions,” in which an applicant’s financial circumstances are not considered as part of admission. The suit, however, alleges that these schools routinely favored the children of wealthy donors when selecting applicants and accuses these schools of “participat[ing] in a price-fixing cartel that is designed to reduce or eliminate financial aid as a locus of competition,” which “artificially inflated the net price of attendance for students receiving financial aid.” In mid-August, the University of Chicago agreed to pay $13.5 million to settle such claims.

As elite universities allow wealthy and “legacy” applicants preferred entry, the burden of student loans falls on others. Two-thirds of the nation’s student debt is carried by women, with Black women shouldering a disproportionate burden—a reality that flies in the face of popular narratives about relief being a handout to the already privileged.

Meanwhile, a 2018 report from the Roosevelt Institute suggests we’ve been thinking about the economics of college education completely backward. Analyzing census data comparing educational attainment across racial demographics with median earnings, Julie Margetta Morgan and Marshall Steinbaum conclude, “to the extent that individuals see an income boost based on college attainment, it is only relative to falling wages for high school graduates.” This is especially problematic for college graduates of color who, as Morgan and Steinbaum point out, “have to pursue more education than their peers for the same or similar positions.”

Once Black college graduates are in these positions, they have a harder time keeping up with their payments and are three times more likely to default. A 2019 study from Brandeis University found that, after two decades, the typical white borrower had just 6 percent of their loan balance remaining, whereas the typical Black borrower still owed 95 percent of their initial loan. In other words, after 20 years of repayment, a typical white borrower was nearly finished, while Black borrowers had barely touched the principal. For this reason, the NAACP has been advocating for a minimum of $50,000 in student loan relief.

Student debt relief and large-scale public investment in universities that are committed to keeping costs down for students will undoubtedly be a huge part of addressing the student debt crisis. But the complexity of the problem necessitates broader policy shifts, particularly when it comes to labor.

President Joe Biden has taken commendable steps in this direction by coupling investments in public education with alternative, noncollege pathways to good jobs. Under the Bipartisan Infrastructure Law, CHIPS Act, and Inflation Reduction Act, his administration is working with unions, community organizations, schools, and employers to expand training programs in broadband, construction, and electrification.

The International Brotherhood of Electrical Workers, for instance, is implementing a program to equip trainees with the tools needed to install and maintain EV charging stations, while the AFL-CIO, in partnership with the Departments of Labor and Energy, is piloting training programs for lithium-battery manufacturing—an effort even Joe Manchin has been able to get behind.

Recognizing that college does not come with the guarantee of a living wage, young people are turning toward labor organizing in hopes of securing a brighter future. According to a 2022 study from Cornell’s School of Industrial and Labor Relations, “unionization throughout one’s career is associated with a $1.3 million mean increase in lifetime earnings, larger than the average gains from completing college.” It should come as no surprise, then, that Starbucks baristas at more than 350 cafés across the country have thrown themselves into successfully organizing unions.

Moving beyond the question of whether college is worth the cost requires a shift in how we perceive higher education. It requires us to stop equating an education with preparation for the workforce. It requires us to recognize that encouraging everyone to get a four-year degree as a substitute for serious labor policy was doomed from the beginning. Perhaps hardest of all, it requires us to recognize that the true value of an education should not and cannot be quantified by its economic return alone.

Biden’s student debt relief program is itself an acknowledgment that the system is broken. But it doesn’t go nearly far enough. It is means-tested and limited to between $10,000 and $20,000 per borrower, both points that concede to conservative arguments. The administration’s shift in direction after the Supreme Court blocked its efforts to cancel more than $400 billion in student loans has been far more conservative than earlier efforts. Worst of all, the administration has not done nearly enough for those borrowers who need the most relief.

Biden now has the chance to tell a new story about who’s gotten ahead and who’s been left behind in this economy. In an election year, it will be an important one, especially given his recent struggles to woo young voters. Let’s hope he tells the right one.