Decline in university enrollment; Student loan relief may not offer enough

  • College enrollment has fallen in recent years, part of a larger trend over the past decade.
  • High tuition fees and the wide availability of jobs that don’t require degrees keep students out.
  • President Joe Biden’s student debt reforms could make college more attractive to some, but not all.

While millions of graduates are to feel better about their decision to go to college after President Joe Biden’s announcement student debt reforms, many young Americans decide that the experience is not for them. And Biden’s plans might not be enough to change their minds.

College enrollment has fallen more than 1% since last fall, according to a recent report of the National Student Clearinghouse. Since the start of the pandemic, registrations have decreased by 6.5%. It’s approximately 1.5 million fewer students pursuing studies.

“After two consecutive years of historically significant losses, it is particularly troubling that the numbers continue to decline, particularly among freshmen,” said Doug Shapiro, executive director of the organization, said in the report. “While the decline has slowed and there are some bright spots, a return to pre-pandemic enrollment levels is becoming increasingly out of reach.”

Falling enrollment isn’t a new trend either – or a leads only by the pandemic. About 3 million fewer Americans are enrolled in college than a decade ago for reasons such as changes in age demographicsthe job availability that do not require degrees, and further examination to find out if the high cost worth it.

This decline could very well continue. In an ECMC group investigation more than 1,000 students conducted earlier this year, only 51% of Gen Z teens said they were considering a four-year degree. This marked a decline of 20 percentage points since May 2020.

While Biden’s August headline announcement may have been up to $20,000 in student loan forgiveness for millions of borrowers, it also laid the groundwork to make student loans less burdensome for students. But that might not be enough to offset the factors pushing students away from college campuses.

Even with student debt relief, concerns over education affordability loom

Along with Biden’s announcement of broad debt relief, he released details of a new income-focused repayment plan, which aims to provide borrowers with affordable monthly payments based on their income, with the promise of a discount after at least 20 years. The plan would allow some borrowers to have their payments limited to 5% their monthly income, which would be significantly lower than what borrowers currently pay under income-tested schemes.

Additionally, students can enroll in the Public Service Loan Forgiveness Program after graduation, which forgives their student debt if they work in the public or nonprofit sector and make 10 years of payments. eligible. The Department of Education recently announced permanent enhancements to the program to make it easier to join by relaxing eligibility requirements and allowing one-time account adjustments to correct past payment errors.

But unless declining enrollment starts translating into a substantial drop in tuition, the cost of a college education may prove too big a barrier for prospective students.

Adjusted for inflation in 2020 dollars, the annual price to attend a four-year college was around $10,000 in 1980. In 2020, it was nearly $30,000 in that year’s dollars.

While Democratic lawmakers pushed back on the idea that Biden’s student debt relief would lead to higher tuition fees, GOP lawmakers clung to that criticism. Senator Tom Cotton of Arkansas said in August that debt forgiveness “was just going to encourage college administrators to raise tuition and spend more money on wasteful jobs like schools with 160 different diversity coordinators.”

Although there are few signs of a significant tuition cut on the horizon, Mark Perry of the American Enterprise Institute already said Insider, there had been a glimmer of relief.

Tuition and university fees increase only 0.9% last year, the smallest increase since at least 1978 and well below the average 7% increase of the past 42 years, according to Perry’s analysis of Bureau of Labor Statistics data.

It remains uncertain if “the higher education bubble is finally starting to show signs of deflating”, Perry said in a blog post. Until that happens, young Americans are likely to remain wary of the cost.

High-paying jobs that don’t require a degree are increasingly common

During the last years, almost record job offers due to labor shortage product wage gains for many workers without degrees. It also led some employers to facilitate their requirements, with a greater variety of careers available to those without a university degree. Others explored alternative forms education such as trade schools, certifications and apprenticeships.

Jasey Tragesser, 27, has already told Insider she dropped out of college in 2014. Today, she earns $135,000 a year as a marketing manager for a software-as-a-service company. In her dozens of interviews over the past few years, she said her lack of a degree “never really came up.”

After leaving a job as a medical receptionist last year, Chyan Smith, 29, became a freelance locksmith despite her lack of experience in the field. already said Initiated. She said someone could “definitely” earn a minimum of $35,000 to $50,000 a year as a freelance locksmith.

As job vacancies fell by over 1 million in August, according to a Bureau of Labor Statistics survey, they remain high, suggesting that there are still plenty of opportunities for those without a degree.

The impending recession could change that, however, especially as the Federal Reserve aims to weaken labor market as part of its efforts to curb inflation. And since low-wage workers are often disproportionately affected when a recession hits, it could be those without a degree – who earn less on average – who pay the price.

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