POLITCO. September 26, 2013. This summer, while millions of American students worked, studied, or readied for the fall semester, the U.S. Senate engaged in a heated debate over the issue of federal student loan interest rates. It’s true that the Senate ultimately passed a compromise agreement, but the legislation and debate largely missed the bigger picture. It is the skyrocketing cost of higher education — not the interest rate on student loans — putting college out of reach for millions of American families.
As the youngest U.S. senators, the problem of college and graduate school affordability is a reality we face in our own households. Like so many other families across the country, we and our spouses continue to pay off our own student loans at the same time we are saving for our children’s college funds. As Congress prepares to take up the reauthorization of the Higher Education Act, we know that incremental reform of our nation’s higher education system will not do. We need aggressive reform whereby federal dollars do not simply subsidize out of control costs, but instead create real incentives for schools to lower the cost of college.
While our economy still struggles to regain jobs lost during the recession, a college degree is even more critical to compete for good-paying jobs. The average unemployment rate in 2012 was 8.3 percent for those with just a high school degree, and 4.5 percent for those with a college degree. Yet the cost of college, which has increased by 300 percent in inflation-adjusted dollars since our parents graduated, is putting a degree out of reach for millions of Americans. And as America seeks to remain competitive in a global economy, we are actually quickly falling behind. The United States once had one of the highest college graduation rates among industrialized nations, but its rate for 25 to 34 year-olds has now fallen to 12th place.
So what should be done? One thing is for certain: Federal higher education policy cannot simply revolve around making it easier for students to borrow money. There are now more than 38 million student loan borrowers in the United States with more than $1.1 trillion in outstanding debt. And there is evidence that easy borrowing simply prompts colleges to raise costs — tuition increases and student loan availability tangle together in a dangerous upward spiral, worsening the situation for future generations.
It is time to reset the foundation of federal higher education policy around two simple concepts: innovation and accountability.
First, innovation is not about simply making more classes available on the Internet; it’s about looking broadly at what’s working and what’s not, and trying something new where the old ways are not cutting it.
There is no reason, for instance, why every student needs to complete an arbitrary number of credit hours in order to obtain a degree. Some students do not need four years —- and the accompanying cost — to be prepared for the workforce. The federal government should be providing incentives — not roadblocks — to schools that experiment with awarding degrees based on student competency, or giving credit to new students for prior learning. Further, at our universities, the federal government should push for the consolidation of undergraduate and graduate programs where possible.
President Obama was correct in saying that it¹s time for America to talk about whether it should take seven years to become a lawyer, or whether students must spend a decade learning before they can be a certified physician.
Second, it is time for the federal government to start being smarter about how it distributes $140 billion in annual federal college aid.
Some colleges are not delivering on the value of the product they produce for the price they charge. For instance, about 40 percent of students who take out loans to attend for-profit universities end up in default, either due to the enormity of their debt or their inability to gain employment after graduation. We must demand that schools achieve reasonable benchmarks when it comes to the cost they charge and the quality of their programming.
We will soon be introducing legislation that will put innovation and accountability at the center of our nation¹s higher education policy. With the reauthorization of the Higher Education Act due early next year, we have a unique opportunity to recognize that the federal government must play a more active role in incentivizing colleges to reduce the cost for students and families.
Like millions of other parents across America, we want our children to grow up in a world where the ability to get a college degree is based on student¹s work ethic and intellect, not the size of his or her bank account.
Today, the cost of college is prohibitive for many students and families. It is time to admit that the status quo is not working. Now is the time to seek out bold reform.
Chris Murphy represents Connecticut and Brian Schatz represents Hawaii in the U.S. Senate.