Washington Square News

Student Debt Strangles Alumni and Economy

By Phoebe, Kuo

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In an email to NYU students, President Hamilton outlined his new budget proposals for the upcoming term, which would result in the smallest increase of the university’s cost of attendance in 20 years. While there is no doubt that President Hamilton wrote with good intentions, there remains a larger question that has been taken for granted in the United States: who should be paying for college in the first place?

It’s a question worth thinking about — whether higher education should be considered as a commodity or a quasi-public good. Quasi-public goods are the goods that non-payers, or people who do not spend money to acquire the goods, will not be able to consume. However, non-payers will still be able to reap the indirect or societal benefits of those goods. Take higher education for example — the students who work hard and receive their diplomas are not the only ones who benefit in the end by receiving decent paychecks. The whole of society profits from a better-educated, more productive workforce.

In some European Union countries, education is fully funded by the state. Many of the most prestigious universities in these countries are public. As a result, the cost of attendance in European Union is fairly low. The taxpayers who fund higher education share the benefit that comes from increasing the overall productivity of society.

However, in the United States, most of the top universities are private universities. Higher education is treated as more of a commodity than a necessity. Students pay for the privilege of a university’s name and a varied skillset that results from a college education — thus the state only provides limited resources for these schools. Either colleges actively look for endorsements, such as donations, to support their programs or students pay for the programs themselves.

Contextualizing higher education as a quasi-public good makes a lot of seemingly tough policy decisions suddenly very easy. We already recognize that many American students are saddled with crushing student debt. That collective debt adds up to about $1.2 trillion nationally, or around $26,000 per graduate. The effects of debt will likely lead to less spending and less financial stability. This trend will only hurt the national economy, taking the biggest toll on the burgeoning workforce coming out of universities in the next few years. The current system forces families to take on significant financial burdens in order to educate their children and benefit society.

The United States has too long contented itself with the power of the invisible hand. But when it comes to higher education, it’s an equality problem. For some students, they might be deprived of the chance to pursue their aspirations since they have to prioritize paying off their steadily accruing student debt. Because society shares the benefits of an educated generation, we should increase the affordability of higher education instead of locking up social mobility for the affluent.

Opinions expressed on the editorial pages are not necessarily those of WSN, and our publication of opinions is not an endorsement of them.

A version of this article appeared in the Monday, Feb. 29 print edition. Email Phoebe Kuo at [email protected]

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