By nature, I usually see the silver lining in the darkest rain clouds, but the Treasury Department’s chief economist gave a speech on Monday that left me deeply discouraged. The current frenzy to rein in public-sector spending, balance budgets, and shrink the national debt may be cutting off our collective nose to spite our face—neglecting investments essential to future prosperity.
Here are the facts. In today’s economy, college graduates are more likely to find jobs and earn higher wages than those without college degrees. That’s not going to change in the years ahead, as decent-paying jobs require higher skill levels and adaptability. But the cost of college is rising, especially at state universities, which educate the vast majority of students. And states are contributing smaller and smaller shares of the total costs required to run their public universities, requiring students to pay larger and larger shares.
Advocates for shrinking state contributions to higher education argue that students (or their families) should pay most of the cost because they will benefit financially from their college degrees. But that argument suffers from two fundamental flaws. First, a highly educated workforce ultimately pays off for everyone in our society, not just for those who get the college degrees. If our system relies too heavily on individuals to self-finance their college educations, we won’t get as much investment—or as many college graduates—as we really need and our future prosperity will be reduced.
Second, requiring individual students to pay, rather than sharing the costs more broadly, perpetuates existing income and wealth inequalities because lower-income families will have the toughest time paying tuition. And even if you don’t care much about inequality per se, there’s mounting evidence that too much of it further inhibits economic growth and future prosperity.
What worries me even more is that those most likely to be priced out of a college education—young people of color—account for a growing share of our total population. The Census just reported that a majority of babies born in the United States last year were non-white and, as I’ve noted before, our country’s younger cohorts are already dramatically more diverse than the baby-boom generation (of which I’m a part).
On average, minority families have lower incomes and substantially lower wealth than white families. These disparities stem in part from past patterns of discrimination and exclusion—some originally enforced through public policy. If today’s policies require families to self-finance their kids’ college educations, we run the risk of crystallizing long-standing disparities at the very moment when our country’s future depends on the skills, intelligence, and inventiveness of its African American, Latino, Native American, and Asian children.