Tuition needs to be phased out

2013-02-07T08:30:00Z Tuition needs to be phased outGuest column by ROBERT O’NEIL
February 07, 2013 8:30 am  • 

College tuition will stifle Montana’s economic growth in the 21st century, and we will not be able to compete in the world market. Economists tell us we must have more and more college graduates to remain competitive. We need to enroll more and more students whose parents did not attend college. In 2020, in the world’s advanced economies the surplus of low-skill workers will be 35 million and the shortage of medium- and high-skill workers will be 18 million. Our world-wide competitors are rapidly building tuition-free higher education.

Developing natural resources is fine as long as it doesn’t replace the development of human resources. Israel has one of the world’s most innovative economies and a standard of living well above those of its oil-rich neighbors. Perhaps God was thinking ahead when he led the Israelites to the one part of the Middle East without natural resources. When you don’t have resources, you become resourceful. Relying on coal to fuel the economy is a delusion; coal mines are closing. Coal can’t compete with gas in the 21st century free market. We must rely on our people.

Our forebears deeded us tuition-free higher education, but our generation has – legislative session after legislation session – cut funding and imposed and then raised tuition until less than 18 percent of the university academic program is supported by public funds. The burden has fallen onto the students. Very few of them have the approximately $24,000 it costs in tuition for four years on the university campuses. For the first time since World War II the enrollment at the Missoula campus has dropped.

The average student is told to borrow money. Since World War II our Montana economy has benefited from college graduates buying a home or starting a business with a loan from a local bank. Now, any surplus money they may have is paying off a student loan to an out-of-state bank. College loan debt is now over $1 trillion.

In 2011, the U.S. Department of Education spent $1.4 billion on student loan collections and guarantees. Fifty eight percent of the 1.8 million borrowers whose loans became due in 2005 had not received a degree. Because they can’t raise the money they are dropping out or they are defaulting. Over half of that 58 percent were delinquent. In 2009, the default rate on student loans for B.A.’s was 3.7 percent; for those with some college but no degree it was 16.8 percent. In October 2012, the unemployment rate for people with a B.A. was 4.1 percent, and for those with some college but no degree it was 9.8 percent. In 2010, the average earnings of Americans ages 25-34 employed full-time with a

B.A. was $45,000; for those with some college but no degree the average earnings were $32,000.

One-fifth of the American work force has some college but no degree. Their jobs are going away or have gone away. The U.S. economy has lost more jobs to robots than it has to moving jobs overseas.

What do we need to do? We need to return our university and community college systems to zero tuition. To do that (for the university system) will require approximately a reduction of $1,000 per student per year for six years or $500 a year for 12 years.

Where to get the money? There is no more economically productive use for part of the present budget surplus than to cut tuition. But, we need a long-term commitment. Texans created a resource depletion tax on the oil companies to pay the people of Texas for the resource that was being taken away and used it for a university endowment. We can do it with coal, gas and oil. We can restore the upper bracket tax cut many of us got a few years ago and keep our money here instead of sending it to Wall Street.

The cost of tuition is pricing the universities out of the reach of more and more potential students, and the publicly funded university system as we have known it for the past 60 years will collapse. We are headed toward learning what it is like to be a third-world country.

Robert O’Neil of Kalispell is a former member of the University of Montana President’s Advisory Council. He is also a former chairman of the budget committee at California State University, Fresno.

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(8) Comments

  1. William89
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    William89 - February 12, 2013 7:16 am
    Those who want to attend college have an option of borrowing money but no one is forced to do that. Furthermore, today the information is probably more available than ever and everybody knows that student loan debt can become a reason for lots of problems in life. You always have a choice to borrow money to pay for college or not. It’s much better to save money and to pay for college with your cash without taking out any loans. But then it’s necessary to make a decision to attend college as early as possible and talk to parents and relatives if they can support you. I think that the saddest fact is that college degree isn’t a guarantee of a successful career and sometimes young professional live through payday loans no fax and work below their skills to pay off college debt.
  2. Roger
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    Roger - February 08, 2013 11:44 am
    How about phasing out the bloat at UM? That would be a good start. Also, eliminate worse than worthless programs like women's studies, black studies, etc.
  3. owenmec
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    owenmec - February 08, 2013 8:46 am

    I would sure like to see the data that more of our factory jobs have been taken by robots than sent over seas. Complete BS. These companies have moved over there or have gone out of business or we would still have 40000 factories full of robots here in the states.
    This bubble will pop soon enough too just as the government created housing bubble blew. Hey how do you like the government created health care crisis. Think not. The gov passed the laws in the 80's to make the american people pay for all R&D done by the medical field . That is why you can go over seas and get pills and procedures done at a fraction of the cost here. They don't pay for the R&D.This is criminal. How many people have died or have been financially ruined due to these laws is anyone's guess, but in my mind its just another problem they created so that they could come up with a solution. We are starting to see now that this solution is going to cause more people to loose their insurance, costs are going even higher and people are having hours cut to part time. Such geniuses we have running the country.
  4. msonelson
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    msonelson - February 08, 2013 8:01 am
    Wait, Wait. At least let me finish paying for my childrens' education first. Then you can increase taxes on my retirement income to pay for yours.
  5. BobbyLee
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    BobbyLee - February 08, 2013 6:42 am
    The majority of jobs requiring a degree don't actually need a degree, it's a paper requirement. The U.S. has somehow caught onto the old British 'professional class' system which separated those with and those without. Twenty years ago the U.S. was never like that, if someone could do the job they were given the job, whether they had a degree or not. All that has happened now is HR departments all over the country - of which there used to be very few - arbitrarily state that their advertised jobs require degrees, when they very clearly do not. All that is required is an interest and incentive, but since the advent of 'being in the degree club' those people are now being left out. For instance, you don't need a degree for any computer work on the planet, but all of a sudden, somewhere in the late '90s, it became a requirement. Universities have foisted that belief onto everyone because they make more money, it does nothing for the country, and, indeed, may very well harm the country, because the tuition of all those unnecessary degrees, and the loans they create, are only paying for bloated administration - a segment of any public institution that has grown considerably more that necessary over the past 20 years. Walk anywhere on the UofM and all you see are administrators. Offices full of dozens of them. It's based on empiric growth, where managers can get a larger salary by overseeing more people, even though most of those people were only hired for busy work (often for managers with degrees who can't use a computer!). The HR resources department - full to the brim with women (there are only 2 men in the whole department), recently adapted a computer run system of hiring. The system created more work for everyone, especially department managers who needed the hire. The system was put in place by a head of department who initially failed the hiring process, but was put in place by Engstrom in some crony maneuver. That's where tuition money goes; empire building. Halve administration and you'll see a better, more lean and efficiently run institution with lower student costs. And, of course, it's of no great surprise that burgeoning administration has only ever occurred in the public sector where there is no profit based accountability. University heads like Engstrom are doing more harm to the education system of this country, and hence its workforce, than anyone could possibly do by trying.
  6. BR
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    BR - February 07, 2013 9:38 pm
    How opportune, Robert, that your call for supporting our youth in college comes as Taylor Brown and others in the legislature make deals to act punitively towards colleges by piling on retention standards. It looks like a demotion of education by the legislature to me; their lip service delights them with their liberality while it impoverishes every one else.
  7. Luce
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    Luce - February 07, 2013 3:11 pm
    When I attended a two-year community college in California, there was no tuition. I credit that college for giving me a hand-up to gainful employment and a ticket to the middle-class. After I graduated, I became employed at the same college as a staff person--a good job with good benefits. I wasn't paying off student loan debt, so I was able to spend my earnings locally. We do, indeed, need to end tuition.
  8. J555-5
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    J555-5 - February 07, 2013 9:53 am
    So, the Board of Regents has not been accountable to any branch of government since 1972. It is apparently not accountable to the people of Montana according to the Board's recent ruling that the measure concerning illegal aliens, passed by almost 80% of the voters, does not apply to them.

    At least with students paying some of the cost of their education, the Board would be accountable to them......maybe.

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