I am writing in response to recent articles in the Daily Herald, "Competing for student dollars" and "Is a college degree still worth it? Study says yes."
In the first article, colleges and universities are investing in new residence halls with high-tech conveniences, suites with private bathrooms, computer labs, cafes and gaming rooms. The cost for these upgrades can be $5,200 a year more than for less-lavish digs.
In 2013, the cost for a bachelor's degree was $122,000. Assuming that a student lives in residence halls for two years, such an upgrade adds an additional 9 percent to the cost of a four-year degree.
In 2013, the average student loan debt was more than $24,000, with 10 percent owing more than $54,000. At an interest rate of 3.4 percent, payments of $236/month for 10 years will repay a $24,000 loan; $531/month would be needed to repay $54,000 over 10 years. Those with a bachelor's degree earn an average of $64,500 ($45,150 after taxes) so repayment of a student loan poses a significant, long-term burden and deters investment from other segments of the economy.
Even more concerning, a third of college grads remain underemployed for most of their careers, although a college degree results in higher pay, on the order of an additional $4/hour for a coffee shop barista or clothing store cashier.
Colleges and universities pay increasing costs for salaries and benefits; I contend that they should not add to the burden of student debt with transient accommodations or unnecessary capital improvements. In my view, the best way to compete for student dollars/debt is to broadcast their efforts to reduce the cost for a college education.