Sometimes, when in full-geezer mode, I am known to offer too much perspective to my young, recently tuition-paying colleagues. I ask them, how much was tuition when I started college? They always stare in silence, perhaps wondering if I had to saddle my horse outside the dormitory. It was $125 per semester at the state university I attended, I tell them. They stare in silence, more.
Money was money back in 1971 and tuition wasn’t insignificant, maybe the equal of a decent downpayment on a used Ford Pinto, but still I could earn enough for a year with two or three weeks work in my summer job. They can’t do that now. Adjusted for inflation, tuition at a typical state university today might be eight times what I paid.
The rising cost of higher education has far outpaced inflation, but I had it cheap because my education was heavily taxpayer subsidized. Typically, students covered less than a third of the cost. The rest came from state and federal appropriation. This was considered longstanding and good public policy, dating back to the Morrill Act of 1862 that created land-grant colleges. My father had prospered with a college education financed by the GI Bill, which was lauded for creating the best-educated generation in history. My grandfather had prospered with a public college education subsidized by land grants and taxes. He paid no tuition. The state invested in higher education, created opportunity for its citizens in every economic class, and reaped rewards through their economic success.
So much has changed. States subsidize less. Tuition covers 70 percent of the cost now. Incoming freshmen facing a $27,000 expense (tuition, fees, room and board, books) for their first year at the University of Washington are finding that as part of their taxpayer-subsidized benefits they will be given the opportunity to borrow money. Many will jump at the chance. The average 2011 Washington graduate had a debt of $22,244. The nation’s outstanding student loan debt is nearly $1 trillion.
No wonder Congress is scratching and clawing over the interest rate on federal student loans. The interest rate on subsidized Stafford loans, one of several federal student loan programs, doubled to 6.8 percent on July 1. A bill cosponsored by Sen. Maria Cantwell, D-Wash., that would lower the rate back to 3.4 percent failed to move forward in the Senate Wednesday. Its support was siphoned off by a rival bipartisan plan to key interest more closely to market rates. The House passed a market-rate bill earlier, said to cut the deficit by $3.7 billion in 10 years. That is a taxpayer subsidy. The 3.4-percent rate would continue that subsidy or raise it.
I have no qualms about taxpayer subsidies for higher education. We have done very well them until now and we have cut them too greatly. That Congress is now arguing about jacking up interest on student borrowing indicates how far off track we have gotten. Individually, the doubled interest rate is not a big deal, estimated at $10 to $15 per month for some students. Collectively, said Cantwell, it comes to $83 million more for 100,000 Washington students over the life of their loans.
Washington’s Legislature took a more effective route. It increased its higher education appropriation by 12 percent, and froze tuition. A small step for students, perhaps, but the end of a long trend of declining support. Subsidies for students, yes. Money absorbed in the higher education bureaucracy, yes. But it pays us back.
Tracy Warner’s column appears Thursdays and Fridays. He can be reached at email@example.com or 665-1163.