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Amy Traub

Middle-Class Task Force Heads Off to College

No wonder we’re all drowning in debt. Over the past 30 years, a college degree has become increasingly necessary for anyone who hopes to earn a middle-class standard of living. Yet over the same period of time, the cost of tuition and fees at public four-year universities has increased ten times faster than the median family income for families with children. That’s a crisis of stagnating wages as well as a problem of soaring college costs. Either way, something’s got to give.

At the Drum Major Institute, we’ve been making that point for years (see, for example, former DMI Fellow Maureen Lane’s substantial body of work on higher education as a route out of poverty), but the statistics never cease to amaze me. The effort to afford higher education is the essence of the middle-class squeeze. So it makes an excellent subject for Vice President Joe Biden’s Middle-Class Task Force.

When the task force convened for its third meeting in St. Louis last week, they followed the now-familiar format. They issued a staff report that defines the problem as the administration sees it; highlights what the administration is already doing to address it; and lays out a potential future path without committing to any new policy initiatives.

The staff report captures the problem beautifully and sets precisely the right goals for the Administration. “The ability to afford a college education without being buried in debt is an important aspiration and a legitimate expectation… for any family in America…The President is committed to making sure that every student has the opportunity to earn a postsecondary credential or degree.” So far so good.

The round up of existing accomplishments includes an array of impressive first steps. The value of the maximum Pell Grant is up, and the President wants to shield funding from the vicissitudes of the annual appropriations process; the stimulus includes an expanded tax credit for college tuition; finally, the President’s budget proposes to shift student lending away from the pork-laden program to subsidize private lenders and back toward the more efficient Federal Direct Loan program.

The task force is less inspiring when it comes time to suggest next steps. Since the report states that “the Obama administration does not officially endorse all of these ideas, but the task force views them as worth of further analysis” we might expect some expansive thinking. And there are some good – if hazy – ideas in there: bolster community colleges, improve “529” college savings plans, help states cope with economic downturns without cutting college funding. The most intriguing idea involves enabling graduates to pay back their loans at a fixed percentage of their income, so people who pursue less lucrative careers aren’t crushed by debt. Still, none of this quite matches the magnitude of the problem.

The reality is, the nation’s public colleges and universities have raised tuition and shifted costs from the states onto students and their families in good economic times as well as bad. A critical part of the story about rising public college costs is tremendous public disinvestment from higher education. The policy not only undermines the middle class but harms the nation’s economic competitiveness. To reverse course, the federal government should consider how to help states renew their commitment to public colleges and universities. The middle class depends on it.

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Posted at 8:39 AM, Apr 21, 2009 in Education | Middle-class squeeze | White House Middle-Class Task Force
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