This is an essay about the standard of living and quality of life. I will focus on government funding for higher education. This is an important issue because student loan is now the second-highest consumer debt category. Furthermore, following Make Lemonade, there are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt in the U.S. alone (Friedman,2018). Higher education provides extensive benefits to students, including higher wages, better health, and a lower likelihood of requiring disability payments, a statement made by Oreopoulus, a professor of economics at the University of Toronto and Petronijivec, a Ph.D. candidate in the Department of Economics at the University of Toronto (Oreopoulus & Petronijivec, 2013).
The central question of my research is, “Is state support for higher education benefits for the economy?” I will discuss 2 globally contrasting perspectives. The first perspective is, state support for higher education is beneficial for the economy. The perspective is best articulated by Leonhardt, an Op-Ed columnist at The New York Times. The government should fund more money for universities in order to create an economic diversity where the poor can also improve their lives (Leonhardt, 2017). The second perspective is, state support for higher education is not beneficial for the economy.
This perspective is best articulated by Republican view, the ownership, operation, regulation, and subsidy of schools from the elementary level through the college level should be ended (Republicanviews, 2016). My initial thinking about the question is that state support for higher education is beneficial for the economy, but after looking at the two perspectives; I think that the government should invest more in funding for universities but with more management.
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To start, the government’s support for higher education is helpful for the economy. Following Leonhardt, the government’s control of school is under assault. He added, “Over the last several years, however, most states have cut their spending on higher education, some drastically. Many public universities have responded by enrolling fewer poor and middle-class students — and replacing them with affluent students who can afford the tuition”. This has caused a decline of economic diversity at top colleges such as the University of California system in which the percentage of freshman that receive Pell grants dropped from 46 percent to 26 percent within a year.
Next, Leonhardt ended his article with a clear statement that, “Today’s economy demands many more college graduates than the country currently has. Producing them won’t be free. But it will be worth it”. This clearly indicates that Leonhardt believes that the government should start investing more on universities because they create a great impact on the economy (Leonhardt, 2017). Moreover, under Powell, the 16th and current chair of the Federal Reserve shows his concern over the rising number of student loans adding up each year. The number of student debt expanded to $1.38 trillion at the end of 2017. “As this goes on and as student loans continue to grow and become larger and larger, then it absolutely could hold back growth”, said Powell when he was asked whether student debt could undermine broader economic growth (Cox, 2018).
Moreover, Girouard discussed that since student loans must be paid back with an after-tax which will cut down the students spending on products and services that help the economy to grow (Girouard, 2018).
However, there is another perspective which believes that the state’s support does not provide any advantage for the economy. According to the Republican view, “As such, the ownership, operation, regulation, and subsidy of schools from the elementary level through the college level should be ended”. The article strongly supports the complete separation of education and state because they believe that it is not the role of the government to educate the youth of the country (Republicanviews, 2016).
According to professor Lin’s video, the more government subsidies for higher education is provided it will create more consumption which leads to higher demand and an increase in price for college tuition (Libertarian, n.d). This suggests that the government’s support for higher education does not make education’s price better but more likely to worsen it.
