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Education Attainment in US Drops: 25-34 Year Olds Less Educated than Parents

by: Jennifer Daler

Sat Dec 12, 2009 at 19:27:15 PM EST


Perusing another blog, I came across this unsettling bit of news (quoted from the Washington Monthly):

A
report by the American Association of State Colleges and Universities indicates that the U.S. is one of only two nations on Earth in which people aged 25 to 34 have lower educational attainment than their parents.

This should be a wake up call to everyone. The Washington Monthly points to the fact that tuition rate increased outpaced inflation from 1958-1996.

From my own experience, I can tell you that my parents went to the City University of New York in the 1950s, tuition free. I am a graduate of the State University of New York system, and the tuition I paid my last year was $700 a semester. Now it is nearly ten times that for an in-state student.

During Ronald Reagan's time as President, federal grants and scholarship programs dried up and were replaced by loans. I left college with no debt. Today, a young adult leaves owing the equivalent of a home mortgage.

Also, I have no idea why college costs so much. Over the last decades, most colleges are increasingly using adjunct and part-time faculty to get out of paying tenure-track wages and benefits.

Many colleges and universities have huge endowments. A trip to teh Google brought this up.

Paced by Harvard University's staggering $34 billion stockpile, 76 colleges now boast endowments over $1 billion after robust returns on their investments over the past year, according to an annual study being released today.

Harvard's endowment rose by nearly $6 billion over the past year, a nearly 20 percent increase. Yale University's endowment, the nation's second largest, rose to $22.5 billion, a 25 percent increase.

Stanford University, Princeton University, and the University of Texas system rounded out the top five.

Now this article is from January of 2008, nine months before the stock market meltdown. But even taking losses, this is a great deal of money. What is being done with it?

According to the article, on average, colleges spent 4.6 percent of their endowments on financial aid, with the richer ones spending 4.4 percent.

The thing I find peculiar is that these entities are non-profits.

The chickens of the 80s are coming home to roost. A poorly educated population hurts our nation on so many levels.

Jennifer Daler :: Education Attainment in US Drops: 25-34 Year Olds Less Educated than Parents
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I'm so glad you wrote about this! (4.00 / 4)
I saw that same stat on dKos and it knocked me over.

It goes hand in hand w/ what Clinton said at the JJ about going from 1st to 10th in college in the US.

The astronomical cost of college is a slow-motion trainwreck that never gets sufficient attention from media and lawmakers, but it is at catastrophic levels now.

I have students who have the brains, but nowhere near the money, to get into schools that now cost over $50K - for ONE year.  It's a joke.

15 years ago the highest-priced colleges were HALF that amount, and even then it was shocking and awful.


There are people who are absolutely convinced that (0.00 / 0)
societies are naturally stratified and this belief leads them to do all in their powers to prove it.  Money, ironically, makes it easier. By simply restricting its availability to people who fit the preconceived notion that they are not entitled to have the "advantages" that money buys, those targeted for subordination are easily deprived.  Money is a great smoke screen for the perpetuation of inequality.

[ Parent ]
I checked the general inflation rate against the college cost inflation (4.00 / 1)
over the past 15 years. General inflation has been 2.6%, college inflation over the past 15 years has been more than double that, 5.5%. At this rate, the cost lof a college education has more than doubled.

Education is a labor-intensive activity, so my guess the cost increase is closely tied to increases in payroll costs. Colleges don't do a very good job of using technology to improve teaching productivity, which would alleviate this. Additionally, federal loan programs have helped to boost demand, which decreases any pressures to cut costs.

As for spending 4 to 5% of endowments on financial aid, I am surprised the figure is that high, particularly at elite schools.  


[ Parent ]
Interesting comment about payroll. (0.00 / 0)
My (perhaps naive) assumption was that the brick and mortar aspects of running a campus that is in essence a village (fuel, food, etc...) was a big factor, which is why I am encouraged by online aspects of learning.

[ Parent ]
the dorms and cafeterias make money (0.00 / 0)
Some of the brick and mortar elements of a college campus are in fact profit centers.   The cafeterias (which are now food courts) make money.  Dorms make money: in fact, housing students is such a profitable business in Durham, the university has to compete with private entrepreneurs.  (And single family homes are being converted to student pads, which is a matter of huge controversy in town.)

UNH, like most major universities, operates a string of sports teams.  Those aren't as profitable as people think they are, but they do turn a small profit and they bring fans onto campus who buy food and licensed apparel.


[ Parent ]
Health care (0.00 / 0)
Traditionally edus pay less but provide much better benefits than "business." So on top of "generic" Baumol cost disease, edus have been hit extra hard by increases in health insurance costs (also an area of Baumol cost growth?). I think most of us can agree that our American healthcare system could be significantly improved, however, to the point that a more efficient system would slow the pace of Baumol's disease.

[ Parent ]
We need to read the whole thing - (0.00 / 0)
Where is the gap?

For example: the diagnosis and prescription is a whole different depending on whether:

  • High school completion is up but college completion is down
  • College completion is flat but advanced degrees are down
  • Other

FWIW: my kids will have more advanced degrees than their parents, or any of their forebears. But there's some thought that 'MA is the new BA.'

Important in any case, though.


My three children have six college degrees in toto. One has none. (4.00 / 1)
The one with four (B.A. 2 M.A.s and PhD) is unemployed.  She was in line for a position at the National Science Foundation but the position was eliminated by budget cuts under Bush/Cheney.

It is going to take decades to recover from what the vandals have wrought.  


[ Parent ]
As far as cost (4.00 / 3)
One part is not a mystery -- state contributions to higher ed have declined year over year since the 1980s.

The second piece is more difficult -- why are operating costs going up, even when you remove the increased student services from the equation.

This ends up being a classic cost disease situation (see this link for an explanation of cost disease theory, and this paper for evidence that college increases are a result of cost disease and not increasing available revenue).

In the state of NH, the state contributes less than 12% to the operating budget of an institution like Keene State -- an amount which does not cover the subsidy they enforce via tuition caps. That is, even with the subsidy, Keene State loses money on every in-state student. Hence, the college has to turn a small profit on out of state students to subsidize in-state students. In the echo-Boom years there were enough students to do this -- but long term it is not sustainable.

The long term solutions are probably to move away from the four-year semester based degree toward a more blended approach that meshes shorter periods on campus with online instruction, maybe making use of local cohorts. The lines between courses, and internships, and service-learning will hopefully get blurred, with colleges coordinating an array of opportunities, only a piece of which is face to face classroom instruction. Assessment will have to move towards authentic forms that build portfolios of work rather than GPAs, and disciplinary boundaries will have to fall as education becomes more application-based: not about the subject you are studying, but about the projects you are completing.

That's the long term.

To get to that long term though we have to survive the mid-term, out to say 2018 or 2020. And that's no easy task. Education is, for a number of reasons, pretty culturally conservative, no matter what people may think, with most people in it being very against change of any sort. To get even small changes adopted on campus involves legislative maneuvers that would make Kagro X's head spin. So it's going to be an interesting few years.



The pattern is everywhere the same. As operating expenses (0.00 / 0)
have been shrunk, capital expenses to build something new have increased to compensate for maintenance and equipment neglect.  This pattern is consistent with the prejudice that expenditures for goods/things are "better" or preferable to expenditures for services/labor.  It is also consistent with the interests of the financial class which is best served by a steady stream of revenue from bonds and other "investment vehicles"--i.e. the banksters get a "cut" or trickle down from capital expenditures; they get nothing from salaries for tradesmen and lecturers.

The building boom wasn't just in residential construction.


[ Parent ]
Those are some good ideas, (0.00 / 0)
but I have to say I benefited greatly from the four year residential college experience. It was my first time having my own checking account, having utilities in my own name, taking responsibility for paying rent, etc.

In addition, when I was a student there,(and it may still be true) the State University of New York put a premium on teaching. While my professors did research and wrote books (one was an expert on Native American land claims in northern NY), they were first and foremost teachers. I got a great deal out of my undergraduate education and am very grateful.


[ Parent ]
I think it is likely (0.00 / 0)
That it may still be a move-away experience for a lot of kids. It just won't have to be.

The problem is, under cost-disease, if you don't gain efficiencies in an industry at the same time as surrounding industries are gaining efficiencies, your costs don't stay stable -- they rise. So a belief in equity demands, for all intents and purposes, that we figure out ways to find those efficiencies. It's the only way to stabilize prices.

In general, I also believe this will lead to a higher quality education, focussed more on application and less on content-retention. But the bigger social imperative is probably the access issue.

Incidentally, what we are seeing with this generation is that they are not paying their rent anyway -- echo-boomers have what are called internally "helicopter parents" -- parents that actually call professors to argue grades, or the registrar to get the finals schedule so they can make sure their kid wakes up in time (via phone calls). Somewhat anecdotal, but crazy stuff.



[ Parent ]
not impressed with "cost disease" (4.00 / 1)
Not an economist, and have not read the original paper, which is probably chock full of caveats and conditions, but every explanation of cost disease I've read starts with the idea that workers get paid more because technology lets them be more productive.

Which, as almost any highly productive assembly-line worker will tell you, is bunk. Workers' wages are still largely driven by supply and demand, not by productivity.  Some workers get paid more because technology has made a wide range of skillsets relatively more scarce.  

The major problem with the cost of higher education is not the cost in and of itself, but that the cost increase has happened simultaneous with the use of higher education as a credentializing service, where the credentials are easy pre-screens for many jobs when in fact they are not really necessary to such jobs.  


[ Parent ]
I too was surprised at the whole idea, supposedly (0.00 / 0)
standard economic theory, that wages rise and fall with productivity.

Economics 101 seems sufficient to explain things. If the Demand for Labor exceeds the supply, the price of labor rises, and vice versa.

I must be missing something.


[ Parent ]
<i>cost</i> of products goes down (4.00 / 1)
Upon further reflection, I can see that it might be arguable if by "labor cost" you mean the cost to produce a product, rather than actual wages. In that respect, efficiencies reduce the cost of many things, and if there are certain types of services that do not become more efficiently delivered over time, their cost will tend to go up faster than the average product/service.

On the other hand, even the base study is flawed in that it ignored the efficiencies that an orchestra gets from selling its recordings. To suggest that education has created no efficiencies is quite a leap.

In addition, someone is going to have to explain to me why the cost of a plumber has not gone up at twice the rate of inflation over the past 30 years - they're still sweating pipes and unclogging toilets pretty much the way they did when I was a kid.


[ Parent ]
The drop-out crisis is a huge problem (4.00 / 1)
The worst situation students find themselves in is having debt and no degree. This report discusses the implications of unmet financial need on low- and moderate-income students, focusing on community college students. Not only has financial aid shifted from grants to loans, need-based aid is being replaced by merit-based aid, generally favoring upper-income students who would have attended college anyway. Unmet financial need leads to part-time enrollment, and working more than 20 hours per week. These are the prime conditions leading to students dropping out of school.

Let Harvard and Yale have their insane endowments. We need to focus on community colleges and other public schools. The Bill and Melinda Gates Foundation is funding a lot of great work to attain their goal of doubling "the number of low-income adults who earn a college degree or credential with genuine marketplace value by age 26."

This is just one of the many reasons why this generation will be worse off than our parents. The economic insecurity of young Americans should be a serious concern, yet it is nowhere on the radar of Congress or the Administration, despite the fact that the election of Barack Obama (and those who benefited from his success) can be credited to the efforts of young people.  


What about racial demographics? (0.00 / 0)
I read the report & followed around trying to find out an answer to this question, but couldn't: What percentage in the decline in American education levels can be attributed to a combination of:
(1) shifting racial demographics, and
(2) continued lack of opportunity for poor & minority children?

Anyone know how that affects these stats?

I ask because the percentage of non-whites in the population is much high among every group as you go to younger and younger populations. (For example, 45% of children under 5 today belong to a minority group.) I don't doubt the nation is getting poorer overall, but we also need to realize the % of those long ago left behind is also growing.

Urban public schools famously lack funding or facilities to provide even an adequate, let alone a first-rate, education and minorities suffer disproportionally as a result of our choices about school funding in this country. As the country becomes less white, it is vital that extra efforts be undertaken to (1) provide a first-rate education to all school-age children and (2) for colleges and universities actively recruit them.

If we don't, then the value not only of education but of the institutions of higher learning themselves will be viewed as irrelevant or unimportant in the an ever-increasing number of America's citizens.


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