Tuition costs have been on the rise. This is likely not news to you but it’s still having a large impact on not only our future generations but also our current economy. According to Mary Kane at Citi, student loan debt makes up nearly a third of all non-mortgage debt in the United States, approximately $1 trillion in total.
From 2002 through 2012, the Higher Education Price Index, which measures the cost of obtaining a college degree, has risen 35 percent; while the Consumer Price Index, a common measure of inflation, during the same time period has gone up just 25 percent. Without serious changes enacted by Congress, it is unlikely we see any substantial transform to the rising tuition trend. The Council on Foreign Relations reported that while the U.S. spends more money than any other developed country on K-12 public education, our students ranked 14th in reading and 25th in math based on the 2009 Program for International Student Assessment survey. Something is broken here and we can’t expect future generations to be able to compete on the global stage unless the education system is fixed. However, one of the things that can be changed is who teaches our children.
Simply improving the quality of the educator has a significant material impact on students. Eric Hanushek of the NBER published a study in 2010 that showed by having a teacher who is above average could improve a student’s lifetime earnings by nearly $400,000. Hanushek also noted that in order to determine the success of a teacher, our school systems must better evaluate the quality of our educators. Unfortunately, current assessment techniques as well as ambiguity in educational policy, according to Hanushek’s research, have not been up to par to effectively accomplish this deferential of teacher performance.
There has been and there will always be those who try to ‘game’ the system. This was one of the faults of No Child Left Behind. When teachers’ compensation is tied to standardized testing scores of their students it’s unrealistic to assume there wouldn’t be cases of teacher-assisted cheating. The problem we face today is like changing a tire on a car that’s still on the road; we must fix the quality of education our children are receiving while they are receiving it.
I wish there was a simple solution to solve the woes of the education system; it’s vitally important that this be corrected – not only for sons and daughters but for our nation’s economy. The effect of the quality education our students receive is far reaching beyond classroom walls. The impact of what is enacted at our schools has the ability to also sway our economy. According to a study from 2009 by McKinsey & Co., if the U.S. raised its education performance to the level of Korea, it could improve the U.S. economy by more than $2 trillion. We must spend less time focusing on how to bring the price of an education down and more time figuring out how to bring up the quality of that education.
Joseph “Big Joe” Clark, whose column is published Sundays, is a certified financial planner. He can be reached at firstname.lastname@example.org or 640-1524.