Higher education is affordable elsewhere, so why is American student debt so colossal?
By Ben Avraham
When Ryan Liu was a high school senior, like many Americans, he started looking into higher education. He knew his parents wouldn’t be able to support him through college so he enrolled into a CSU, which he thought would be affordable. However, before long Liu realized even a Cal State was not within his means.
“Even though I got financial aid, it still wasn’t enough to cover everything,” Liu said. “Realistically, it couldn’t cover all I needed for classes, books, I couldn’t get on-campus housing, and rent for an apartment would have been really expensive, and as someone who has grown up seeing my parents struggle with six figures of debt, that really scared me so I decided to tell the registrar that I wasn’t going to enroll in the fall before classes were set to start my freshman year.”
The national student loan debt is $1.77 trillion.
In our day and age of infinite knowledge of the World Wide Web and self-learning artificial intelligence, there is a question of how traditional education can keep itself relevant when it is getting further out of reach for many.
On Oct. 4, the Biden administration announced it allocated an additional $9 billion in student loan relief totaling $127 billion. The program will allow 3.5 million students across the country to have some of their debt canceled. The move comes after the Supreme Court struck down the white house’s original plan of forgiving $400 billion.
The average costs of public and private nonprofit education have been on the incline for the past 30 years, according to a report by the College Board.
Despite the current administration’s grants, student loans remain a huge burden for many Americans pursuing higher education.
Statistics published in a report by the research organization Education Data Initiative in May 2023, provided insight into the magnitude of the issue.
There are 45.3 million Americans with student loans, and 92 percent owe the federal government. The average student loan debt is $37,338 for federal loans per borrower and $54,921 for private student loans. The average student borrows over $30,000 to pursue a bachelor’s degree. Twenty years after entering school, half of the student borrowers still owe $20,000 each on outstanding loan balances.
According to College Board, in the 2022–2023 academic year, the average cost of attendance per year, which includes tuition, fees, room and board, books and supplies, and transportation, was $27,940 for public four-year in-state students and $45,240 for public 4 year out-of-state students. Private institutions reached as high as $57,570.
Those numbers represent costs per student per year. If one chooses to attend a 4 year institution for all 4 years, the costs easily mount to hundreds of thousands of dollars, and some families will have more than one student in the household at once.
Yet, in the current academic year, prices increased by $270 for full-time undergraduate in-state students and $850 for out-of-state averaging at $11,260 and $29,150, respectively.
As far as in-state tuition costs, California ranks below the national average at $8,401 for full-time undergraduate students, according to Education Data Initiative.
Yet, students in California face extremely high living costs that make it harder for many to afford. Data from the Missouri Research and Information Center ranked California 48th on their list of most affordable states, trailing behind the District of Columbia, Massachusetts, and Hawaii.
“The majority of the loans I’m paying back right now are for housing and living costs,” recent graduate Tally Roth said.
Roth, 32, recently graduated from San Francisco State University with a master’s degree in Communications. Roth spent the past decade attending school, juggling between taking classes and fulfilling her financial obligations.
“It took me 10 years because I was working and doing classes here and there, and that was definitely challenging,” Roth said. “I was staying with my parents, doing it slowly.”
According to a 2017 report by the OECD, the U.S. had the highest tuition costs by far from any OECD member country. However, the CSU system’s board recently voted to increase tuition by 34% or $1,940 by 2029, despite students’ opposition. Meanwhile, the school system’s new chancellor will earn almost $1 million a year.
According to OECD.org data, the United States spent 3.3% of its total GDP on primary through post-secondary education in 2020, while Germany only spent 2.9%.
Daniel Dotan, an Austrian citizen studying engineering in Berlin, Germany, said his tuition as an undergraduate student in a public university is free. However, he pays approximately €120 per semester in administration fees and is also eligible for €980 a month in government loans to cover his living expenses.
Dotan said that financial obligations are rarely considered when applying for college, and taking government loans isn’t a concern since the monthly installments are negligible.
“I’ll only need to pay it back as long as I graduate and earn above a certain threshold afterwards, and no more than €10,000,” Dotan said.
Dotan’s brother, a Ph.D. student who studies astrophysics at a different university in Berlin, is facing the same conditions.
“My brother has been studying for five years now and has been receiving aid for the entire time for the sum of approximately €50,000, yet he will not need to pay back more than €10,000,” Dotan said.
While many students and recent grads around the world can live almost carefree regarding their academic endeavors, students in the U.S. are extremely concerned with the burden of paying back their loans.
“It’s been six months since I graduated, now my loans are starting to come due,” Roth said. “This month is the first time where I’m really starting to worry a lot. I started to lay down roots in San Francisco, and I think I’ll have to relocate. I really am looking at moving back in with my parents in a couple of months.”
Roth estimates her monthly payments at approximately $300 a month and, in the meantime, has applied for Biden’s new SAVE plan to help her while she is looking for a job. While the program is “progress in the right direction,” Roth said, the cost of living remains a major challenge.
“How would somebody even make that payment? There’s no way that I can survive in SF, make that payment, plus all of my other responsibilities, and with all the inflation, it’s insane,” Roth said.
In addition to Germany, Denmark, Estonia, Finland, Norway, Poland, Slovakia, Slovenia, Sweden, and Turkey all don’t charge any tuition fees from their citizens for higher education.
In an interview with CNBC last year, Will Bunch, the author of the book After the Ivory Tower Falls, told journalist Annie Nova that the reason for the high prices of education in the U.S. is because the general public is not willing to support it.
“We’ve chosen to privatize higher education rather than make it a public good,” Bunch said. “Taxpayer support for public universities has plummeted in most states. In my own state, Pennsylvania, it’s dropped from 75% of the cost to just 25%. Students and their families are asked to make up the substantial difference.”
As support for public universities is declining in the U.S., in Germany people see affordable education vital to their social and economic prosperity.
“They believe very strongly that better education directly results in a better country. They see it as an investment,” said Dotan.
Dotan added that while private universities do exist in Germany, they are generally perceived as inferior in their quality of education compared to the public institutions.
Roth, who is soon due to start paying back her student loans, said that she sees the interest on student loans as one of the biggest concerns with the current way America is paying for school.
“I haven’t had to pay something just yet, but I am looking at the payments, and realistically, if somebody can’t find a job right after they get out of school, they’re going to drown in the interest, the interest has always been a really big issue,” Roth said.
Roth explained that she feels lucky to have found the SFSU program that enabled her to complete both her bachelor’s and master’s. However, many students decide not to pursue higher education due to the costs involved.
“It’s really sad seeing so many people choosing not to go to school because they don’t want the debt,” Roth said. “If I wouldn’t have had this program that they created, it was just perfect timing, I never would have done that.”
After withdrawing from four-year universities, Liu decided to enroll in PCC, a decision he attributes a lot of his success to. Upon graduation from the city college, Liu was able to secure a few scholarships which enabled him to attend Yale, where he ultimately earned a doctor’s degree.
Now, he is trying to return to the school where he began his journey and offers a few ways in which PCC can help students like him.
“The unfortunate reality is that even though community college is one of the most affordable ways to access higher education, it’s still not always enough,” Liu said.
One way to tackle this, according to Liu, is to offer flexible class schedules that will allow working students to be able to attend classes. Another is to offer students with prior experience advanced placement in what is known as Credit for Prior Learning (CPL). Lastly, Liu said he thinks community colleges need to expand dual enrollment.
Despite many efforts to curb costs for students, the systemic issues of the price of education in the U.S. are affecting generations long term.
“I can just really see the toll that it’s taking on our generation,” Roth said. “Especially as this is the time of our lives when we want to look at buying a house or having a kid, and you kind of have to make that choice of am I going to buy a house, am I going to have a kid or an apartment or pay off my student loans, it really comes down to that people having to choose and decide against big life opportunities.”
