Graph of the Day: Has the U.S. Fallen Behind in Higher Education?
Despite having the unfortunate distinction of being the first and only industrialized nation to amass over $1 trillion in outstanding student loan debt, the United States no longer leads the world in college graduates. According to the latest data from the OECD, sixteen countries now have a higher percentage of college graduates than the US, which had arguably the most educated workforce in the world during the postwar years. (The graph below does not include Japan, which also outranks the US.)
In absolute terms, the United States is not producing any fewer graduates than in the past. But as a percentage of the population, our numbers haven’t budged in a generation. Only 41 percent of 25- to 34-year olds held a college degree in 2009, the exact same percentage as their parents. The rest of the world, meanwhile, has surged ahead, leaving us 48th in math and science education, and near the bottom among industrialized countries on international math tests. Compounding the problem is the fact that just 60 percent of undergraduates actually complete their education within six years. The other 40 percent still have to repay their student loans—but with none of the added benefit of the college degree wage premium.
The story is essentially the same for high school graduates. While nine out of ten Americans aged 55 to 64 hold a high school or equivalent degree—far and away the highest percentage in the world—their children and grandchildren have fallen critically behind. Today just 88 percent of 25- to 34-year olds have graduated high school, fewer than ten other OECD countries, including Korea, the Slovak Republic, the Czech Republic, Poland and Slovenia.
It is difficult to draw conclusions from such data. US GDP per capita is higher than all but Norway and Luxembourg among OECD countries, despite its stagnant graduation rates. Germany, another powerhouse economy, also has seen little or no change in its number of high school and college graduates in the last 30 years. And the United States still accounts for over a quarter of the global 25- to 64-year old population with tertiary education—about the same percentage as the next three largest educators combined (China, Japan and the United Kingdom).
Still, these graphs are instructive. America’s economic hegemony in the second half of the 20th century was built on a strong, well-educated middle class, thanks to major investments in higher education like the GI Bill. That commitment has wavered in recent years, as states have cut back their funding for the state and community colleges that educate 75 percent of all US undergraduates, even as the cost of tuition soars. And if a growing number of Americans find themselves financially unable or educationally unprepared to enter higher education, what future can there be for such a middle class? “The net effect,” writes Joel Klein, former Chancellor of the New York City Department of Education, “is that we’re rapidly moving toward two Americas—a wealthy elite, and an increasingly large underclass that lacks the skills to succeed.”
Graph of the Day: For High-Scoring Students, Socioeconomic Status Still Matters
My colleague Greg Anrig continues live-blogging his critique of Charles Murray’s Coming Apart: The State of White America 1960-2010, with a deconstruction of Murray’s claim that top-tier universities perpetuate a genetically superior elite, whose privilege further isolates them from working-class Americans. As Anrig points out, class privilege in higher education is a problem The Century Foundation takes seriously (our own research shows that 74 percent of the students at highly selective colleges come from the richest socioeconomic quartile, while just 3 percent come from the bottom fourth); but Murray’s obsession with genetic explanations (as in his debunked theories about racial intelligence in The Bell Curve) and his conservative ideology blind him to essential facts about the way that class privilege operates in the real world.
The fact is that among high school students who score in the top 25th percentile on standardized tests, socioeconomic background remains the most significant predictor of whether they will go on to earn a college degree. According to a 2010 Century Foundation report, high-scoring students from a poor socioeconomic background were more than 80% less likely to attend a four-year college than their wealthy peers, and five times more likely to attend no college at all. And with the cost of a four-year college education skyrocketing, is it really any wonder that affordability has become a major obstacle for equally intelligent and deserving students? But Murray takes no time to consider whether income inequality–rather than an inevitable, genetic aristocracy of talent–is to blame for this concentration of class privilege. The data below, from the U.S. Department of Education, tell the true story.
Graph of the Day: Household Credit Market Recovering, But Student Debt Soars
By Benjamin Landy
Two years after the nadir of the recession in early 2009, the household credit market is slowly stabilizing. According to the latest data from the Federal Reserve Bank of New York, loan defaults and delinquency rates are falling for car payments, mortgages and credit cards, with total household debt down over a trillion dollars from its peak. In other words, Americans are finally getting their borrowing and debt payments under control—with one major exception. Student debt continues to rise ominously, with loan delinquency up 30 percent since 2009, and a whopping 400 percent in the last decade.
Bucking the deleveraging trend, total student loan debt has multiplied fivefold in the last ten years, from just $120 billion in 2001 to around $550 billion today—and shows no signs of stopping. Contra the NY Fed, the New York Times estimates that student loan debt has already outpaced credit card debt, and will likely top a trillion dollars this year.
Source: New York Federal Reserve Bank
The graph above illustrates how much better Americans have gotten at meeting their loan obligations on time: delinquency rates are generally back to where they were in late 2006, before the beginning of the financial crisis. But student loan delinquency has continued to rise, surpassing Home Equity Line of Credit (HELOC) and mortgages in growth.
The graph below zooms in on the change in loan delinquencies since 2009, at the trough of the recession, highlighting the seriousness of the problem: while students have less money than ever to pay for college, demand for higher education has only grown. Loans are the only available option for most students, even though they are finding them harder and harder to pay back.
Part of the problem is that, over time, the federal government’s commitment to student aid has changed in focus—increasingly relying on loans, rather than grants. Richard Kahlenberg, a Senior Fellow at The Century Foundation and an expert on education policy, is worried:
“Students, particularly those from low-income and working class families, are trapped in a double-bind. On the one hand, over time, federal financial aid has shifted from grants to loans. On the other hand, the institutional funds provided by colleges and universities has shifted from need-based to non-need merit aid. Low-income students are especially hurt by these trends, but in the end, we all lose out.”
View more from the Graph of the Day Series.
