Saturday, April 03, 2010

"Conservative" cut-everything policies cutting middle class opportunities for a university education.

Hi everyone,

A bit of goulash about money and college this week as we're sidelined regarding local politics the weekend before elections. If common sense prevails, the Common Sense Citizens Sturmabteilung will not.

In the meantime, Saturday's column.

Students busting it and protesting for affordable education

Pell grant change should help

These days my classes are filled with students scraping to make ends meet, carrying full course loads, and working full time to pay for it – and they’re caught in a Catch-22: the more they work, the less time they have to study, the less time they have to study, the lower their grades, but if they cut back on their work load to improve their grades, they won’t make enough money to pay for their tuition. They’re stuck.

When people my age hear this, they scratch their heads and say “but when I was in college, I was able to pay for everything while working part time.” During the mid-’70s I only had to work about 20 hours a week at minimum wage to pay for tuition, gas, and an occasional beer. Today’s students struggle to maintain their GPAs high while working 30-40 hours a week. How could that be?

There are two complications: 1) minimum wage is lower today than it was 30 years ago and 2) the full cost of tuition has been increasingly shifted on to the individual student.

The minimum wage in Wisconsin is currently $7.25 an hour. Starting in 1976, when I first strapped on that blistering Red Blazer for the Ramada Inn Corporation, I made a whopping $2.10 per hour. (I worked the front desk and sometimes as night auditor. Hotels offer the perfect job for college students; each shift contains a few hours of chaos when guests check in or out, and then things quiet down and give you the chance to study. [online version: I was finally bumped to $2.15 an hour after stepping up to check in a VIP guest who only spoke German -- thus also being given my first lesson in how corporate America values education among its bottom rung employees].)

$2.10 an hour doesn’t sound like much, does it? Surprise: $2.10 in 1976 dollars is equivalent to $8 an hour today; that is, 75 cents more than the current minimum wage. In other words, I earned 9.73 percent more per hour in 1976 than minimum wage employees do today.

On top of earning less in real wages than students did 30 years ago [when, say Glenn Grothman and I were in college] , today’s students are also paying a larger share of their own tuition. Twenty years ago the state of Wisconsin paid for nearly 75 percent of the cost of a student’s education. Today the state’s contribution is closer to 25 percent.

Tuition has had to go up to compensate for the lack of commitment in the Legislature. The student protests at UW-Milwaukee are a result of successive waves of tax cuts shifting the cost of a university education to the shoulders of students. The main effect of this trend has been to make it increasingly difficult for people from middle class families to afford a university education without incurring terrible debt.

All that tax cutting looked great in election year literature, but the chickens are coming home to roost.

Given these obstacles, the determination we see in today’s students is inspiring.

The Pew Center just released a report on this remarkable bunch. The current crop of 18- to 29-year-olds, now nicknamed the Millenial generation, is different from both Gen-Xers and Boomers. Some of the more obvious differences include: over 75 percent are active on a social networking site, 20 percent have put a video of themselves up online, nearly 40 percent have tattoos and about 25 percent have a piercing somewhere that is not an earlobe. Pretty amusing stuff. But here’s their predicament: 37 percent are unemployed – the highest rate of unemployment in this age group in over 30 years. At the same time, 39.6 percent of 18- to 24-year-olds were enrolled in college in 2008 and half of them hope to stay in college through graduate school. That’s a record, too.

Millenials will be the best-educated generation in U.S. history – they’ll have to be if we expect them to compete with China and India.

But 36 percent of them are not in school and polling data tells why: they say they can’t afford it.

Fortunately, this week, President Obama signed The Health Care and Education Reconciliation Act which will deliver larger Pell Grants indexed to compensate for years of inflation that eroded the grants’ purchasing power. The extra funding comes primarily from cutting banks out of the pipeline, banks that were being subsidized with tax dollars to deliver these loans.

The Congressional Budget Office is estimating about $68 billion in savings over the next 11 years. That money can now go to students to help them pursue their education and improve their lives and the lives of their families.

Another big chunk of funding is going to the nation’s two-year colleges which, if I may exhibit a little Badger-bias, will help those two-year campuses catch up with the two-year system here in Wisconsin, where we still deliver the most bang for the student dollar.

And so on. Next week, Milton Friedman.


1 comment:

DanBack said...

Really? The paper doesn't let you or Owen write about local races the column before the election? Why not?