On My Impending Tuition Increase

See that robe? The guy wearing it is helping make it harder for you to wear it.
The Commercial Appeal reported yesterday that tuition at state schools next year will increase by 3-8% next year. This marks the 5th year consecutive year of tuition increases totaling as much as a 50% increase over that time period.

In my time in school, I’ve had the pleasure of experiencing these tuition increases, and I’ve noticed something really important. It’s one thing to pay more for something because the quality of that something has gotten better. It’s quite another thing to pay more for something whose overall quality hasn’t increased, because the state government just decided they didn’t want to appropriate more money to it.

What’s causing this? An arbitrary request by Gov. Haslam that MOST DEPARTMENTS in state government return a budget proposal with a 5% decrease in spending.

This makes me wonder…which departments did the Governor decide wouldn’t arbitrarily cut their budget?

All of this is happening as the Department of Finance and Administration announces collections have outpaced projections for the four months that make up this fiscal year. Over all, collections for the general fund are up $59.1m for the past four months (July, August, September, and October).

At this rate, the State could expect to see around $180m in additional revenue to the general fund not accounted for in the budget.

The State of Tennessee projected some $10.77b in general fund tax collections for the year. While a $180m overage in collections may only account for 1.6% of that projected total, $180m could go a long way to resolving a lot of hurt out there.

Last year, the University of Memphis saw its state funding cut by over $20m alone. Overall, the University of Memphis lost nearly $31.5m in funding, with no decrease in students. That means students had to bear the brunt of the funding decrease (it should be noted, $10m of that decrease came from cuts at the Federal level). This represents a 17% decrease over the previous year.

Even UT Knoxville, the flagship of the state’s higher education system, saw a huge decrease in funding of 12%. That’s a sight less than we experienced here, but considering tuition is generally higher at UT Knoxville, it still represents a huge increase for students.

These cuts beg the question, if a college degree is the key to long-term financial success in today’s economy, why are we putting such a premium on it?

Studies of median income in the United State show that individuals with a college degree make, on average, $16k more a year than their counterparts who only have a high school diploma. Over the course of a career, that additional $16k/yr means those with a college degree will make nearly $500,000 more than their high school graduate counterparts.

But all of this assumes there will be jobs, and the costs associated with going to college won’t unduly hinder the economic prospects of the college graduate. According to a recent study, the average college graduate leaves school with over $26,000 in debt. That’s a whole lot of debt for someone who’s trying to start their life out on their own.

What’s more there are concerns that the vast expansion of college debt may be the next bubble to burst, which would further hurt the economy, and negatively impact the earning potential of new college graduates. (Read more about the concept of bubblenomics here.)

It seems to me that this is an area of the economy where both parties have failed. While I applaud the President for working to help students with their loans, this doesn’t address the overall weaknesses in the economy that led to jobless recoveries starting in the 1980’s.

Truth be told, there are just too many college graduates delivering pizzas and tending bar. They don’t work these jobs because they’re lazy, they do it because the hiring prospects are dim, and as weird as it may seem, in some cases they make more at these jobs than they would working in their area of study.

Why is this? Well, there are a lot of reasons, but ultimately it comes down to the reality that the economy just stopped creating jobs about the same time we started making it really easy for corporations to send manufacturing overseas. The decrease in blue collar jobs has led to a decrease in all jobs despite the rhetoric that we’re moving to a “service economy”.

So now, in order to get a management job at the Gap, you have to have a college degree, where once upon a time, when I was just out of High School, a diploma was all that was necessary. This credential inflation not only negatively impacts people who have degrees, but those who don’t. According to the Census Bureau, nearly 30% of the population has a college degree. That means that the 70% of the people who don’t, are effectively cut out of the good paying jobs that once existed for them.

Add this to the overall income stagnation for median income earners, and you’ve got a recipe for economic disaster.

The economic foundations that led to the expansion of the middle class in the post WWII economy that included large public investments in the future of the nation has been replaced with a theory of the knife. Cut everything, taxes, investments, you name it. With those cuts came decreases in the economic outlook of folks who actually achieved levels of educational attainment that their parents might not have. In the end, this creates a stalled system that is reliant on market manipulations to create return on investment rather than real growth. That, in a nutshell, is bubblenomics.

It’s no wonder that people are angry. They’re realizing they’ve been sold a pile of crap, and, to quote the movie Network, they’re “mad as hell, and not going to take it anymore”.

If we want real growth, we have to return to the economic policies that built growth. That means increasing investments in infrastructure and education. That means planning for the future of the nation rather than looking for a quick “right now” fix. As a nation, we’ve lost our ability to look beyond the right now. Some may blame this on “fast food culture” but I blame it on an over-reliance on political cycles and over-heated rhetoric that has kept us distracted while a very small percentage of the population benefits most.

All of this goes back to the culture of cutting.

While I’m sensitive to the revenue problems facing the state and the nation, I submit they are of our own making. We have to make a concerted effort to invest in our future if we are to have much of one. Cutting higher education just makes that future that much more difficult for our children to attain. Combined with all the other cuts that are, no doubt, in our future, the overall outlook is grim.

We can stop it if we choose to. But first, we have to make that choice.

One Reply to “On My Impending Tuition Increase”

  1. You said it, Steve! While the 1% says everyone can be successful if they work hard and stay in school, you and I both know that plenty of smart, capable, hard-working people are shut out of this economy because they don’t have the money to go to college or to stay in college once they get there. Tuition, even at state schools, is so expensive that there’s really no way anyone can “work their way through college,” as they used to say. Effectively, it means we have a caste system in this country: those with money and connections can get into a good college and get a degree; those without do not. Even when a disadvantaged kid does manage to acheive the dream to get a degree, he or she is usually saddled with a crippling student loan debt.

    I just want people to recognize that the United States is not the egalitarian society that we mythologize about. In actuality, people are born to a certain class of society in this country and it is very difficult for them to ever move up to a higher class or higher standard of living. However, people can and do drop into a lower class or standard of living, and when that happens, it’s not because they are lazy or they “deserve” it. It’s because of the inherent injustice in the system.

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