Knowledge for debt?


As we head towards the celebration of my nation’s birthday, July 4th, two news items just crossed my desk, which seem utterly at odds with the concept of freedom and liberty. First, in its efforts to constrain costs and increase consumer information, the U.S. Department of Education released the latest college costs lists on its College Affordability and Transparency Center. Next, a consulting group released a sobering infographic that analyzes of the parallels between current student lending and mortgage lending crisis of 2008.
According to the U.S. Department of Education, some of America’s elite universities and colleges have net prices reaching nearly $50,000 per year (£29,142). At the same time, student loan debt has exceeded more than $1.1 trillion. According to the Carlisle and Gallagher Consulting Group, student loan delinquency rates have doubled between 2004 and 2014, a curve far steeper than the mortgage crisis of 2008, which brought most of the world’s economies to their knees and ushered in the Great Recession.

Higher education is an expensive business to be sure. Here in the States, governments have reduced their direct contributions to their colleges and universities, effectively shifting the cost burden to students and their families, who borrow increasing as a means of financing education. This at the same time policymakers are decrying the decline in educational attainment rates in the United States.

But America is not alone. Britain started allowing universities to charge tuition fees in 1998, and then in 2004, allowed institutions to more than double those fees from £1,000 to £3,000. Despite contentious debate and student protests, the government to date has allowed fees to increase as high as £9,000. According to the Government’s Student Loans Company, outstanding student loan debt in the U.K. now totals £62.2 billion. So if my math is correct, America’s student loan debt equals $3,448 (£2016) per person, and Britain’s £980 ($1,680).
Clearly, both the U.S. and U.K. are committed to maintaining an educated citizenry. What’s troubling is the increasingly reliance on debt to finance education. It is the next mortgage crisis in waiting, and student loan debt could threaten our economies just as overly liberal mortgages did in 2008. This is because forcing students to borrow increasingly to pay for college or university is akin to floating capital to those with limited incomes and little to no equity.

If the goal is to invest in our people through higher education, are we constraining liberty and freedom by heaping debt on the next generation of problem-solvers, innovators, public servants, etc.? It seems terribly ironic that on the eve of the 238th Anniversary of American Independence we should recall the third American President Thomas Jefferson’s “an educated citizenry is a vital requisite for our survival as a free people,” and wonder how that might be possible in the future. If the cost of college and university education continues to increase and students and families more reliant upon borrowing, freedom surely must yield to constrained economic and occupational choices. That’s a price neither the U.S. nor Britain can afford to pay.

J. Noah Brown is the president and CEO of the Association of Community College Trustees and the author of First in the World: Community Colleges and America’s Future. He is based in Washington, D.C.

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About Paul Champion

Some have called me a leader, and a entrepreneur, they say I have integrity, presence and skills to ensure continuous improvement and success in whatever challenges I face. They also tell me that I am positive, resilient and motivating. I say, I'm just a normaI guy from Gateshead in the North of England, who started as an apprentice engineer. I have been in the right place at the right time and in the wrong place at the wrong time! I have successfully initiated and led complex organizations and situations to completion and success, and I have been in some jobs where success seemed untouchable. Mainly though, I have tried to learn everyday, help people to progress and learn the skills they need to be successful. I have had the privilege of working with some great people locally across the UK and more recently internationally in Asia, Europe and now USA, where I am lucky enough to work for where I am head of 3aaa USA. This website is just me having an outlet to talk about all those thoughts, ideas and things I learn that pass through my head every day when I face the challenge of doing business. I will also rant on about how great apprenticeships are, and how you can help change peoples lives through them. After all thats how I got to do the great things that I have done, and also I am still an apprentice everyday! All I ask is that if you find it interesting then leave a comment and share what you read. THANK YOU.

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