(NewsNation) — President Joe Biden fulfilled a long-standing campaign promise Wednesday to the more progressive side of the Democratic Party when he announced he would be providing student debt relief that experts say could benefit as many as 40 million people.
“Using the authority Congress granted the Department of Education, we will forgive $10,000 in outstanding federal student loans,” Biden said.
Biden also announced federal Pell Grant recipients will receive up to $20,000 in student debt forgiveness. This gives Biden and Democrats an item to check off as they campaign in the coming midterm elections. But the debt forbearance was immediately criticized by conservatives as an irresponsible federal government giveaway and by progressives as not going far enough.
But lost in the conversation of debt forgiveness is a larger issue. That’s the increase in the cost of college tuition over the past 30 years, which has a lot of people asking a much tougher question: Is a college degree even really worth it anymore?
A headline from CNBC notes that “College costs have increased by 169% since 1980, but pay for young workers is up by just 19%.”
According to a report from Georgetown University, more and more people are asking the very same question asked by a New York Times columnist in a column that was published this week: “Some colleges don’t produce big earners. Are they worth it?”
The column relies heavily on a report from the center left think tank Third Way, which looked at all available data for higher education institutions. It found that more than half of college enrollees were not earning more than a high school graduate six years after they began their studies. There was an increase 10 years later, but only 29%
Biden’s loan forgiveness seems like a decent idea on the face of it, especially for those, obviously, who owe on student loans. But for some, it seems more like the U.S. is addressing a symptom instead of trying to solve the actual underlying problem of skyrocketing college tuitions.
Michael Itzkowitz, a senior fellow of Higher Education at Third Way and author of the study, appeared on NewsNation’s “Dan Abrams Live” on Wednesday to weigh in on the issue.
“We do know that the number one reason why students attend college year after year is for greater employability and to have a financially secure future. So we’re starting to see more and more people ask, you know, what is the actual return that I’m getting for these tens of thousands that I’m paying for a college credential?” Itzknowitz said.
Why is the cost of college going up? Itzkowitz points to state disinvestments, specifically in public institutions.
“As states invest less, ultimately, we do see tuition and net costs that students are paying go up. We’ve also seen the proliferation of for-profit colleges, and some of them to offer good returns, but they do disproportionately offer poor returns,” Itzkowitz said. “So it’s really important that students look at the net costs or the costs that they’re going to be paying out of pocket relative to the earnings that they can actually obtain.”
Itzkowitz says another step the Biden administration took Wednesday is committing to publishing a list of institutions that may not have a good return on investment or may leave students with unmanageable debt. But it’s unclear how this will get into the hands of parents and students.