In Part Two we explored the who, what, when, why and where of education and training, the five “Ws.” Clearly some of the Ws are very much debatable. For example, one can argue that when someone graduates from high school at the age of 18, he or she should be fully capable of functioning as a voting citizen. He or she should be able to fully analyze a ballot petition and exercise judgment in casting a vote. What is really required to do this? And what about those people that failed to graduate from the twelfth grade? And for the 13 years of primary and secondary school, it costs the government about $168,000 per person.
In problem solving and planning, identifying the five “Ws” is the easy part. The hard part is identifying HOW to do it. For example, you detect a problem in something you own, perhaps a leak in a pipe. How do you fix it? Do you do it yourself and have to learn how or do you simply locate and call a repairperson using your smart phone? How seems fairly straightforward unless payday is next week and the repairperson demands immediate payment.
Switch to the education and training system and look at the cost. Perhaps the “how” is to improve the efficiency of the system thereby reducing the cost. There are about 50.6 million students enrolled in the US K-12 school system costing about 632 billion dollars per year. And when they graduate, for what jobs do they qualify? Or, to do better, how much additional training and education is needed? How do they get it, how much does it cost, and how do they pay for it?
Everything (OK, lots of things) today seems to be viewed from an economic standpoint. In his book The Case Against Education, Bryan Caplan suggests that for a good or better student the education system is a good thing economically, but for the average or below average student and society as a whole the return on investment is poor. It is a number crunching analysis the leads to broad conclusions about the five “Ws,” but offers little suggestion about how to improve the system.
When a person graduates from high school today, it appears that more education and training are essential and desirable with a great part of the cost to be borne by the student, either out of pocket or through a loan, scholarships notwithstanding. Public institutions of higher learning (post-secondary) receive some government support while private not-for-profit and private for-profit institutions receive less or no government support. The tuition and fees for the four year institutions in 2016-17 averaged $8,800, $33,500, and $16,300 respectively while the two year institution numbers were $3,500, $17,300 and $14,500. Whether it is a four year or a two year post-secondary institution, the costs are significant.
Add to these tuition and fee costs the expense of living. Off campus living with family is on the order of $5,500 per year while on campus room and board is about $15,300 as is off campus without family. While the numbers vary depending on public, non-profit, profit, four year and two year, the average student loan debt for the class of 2017 graduates is about $39,000. And, according to the Student Loan Hero website, by state the range is $18,425 to $36, 193. New Mexico is second at $21,805.
According to US News, a $25,000 student loan will require a $125 monthly payment for 20 years. If the loan is $50,000, the payment is $450 per month because private loans come into the equation. And for every additional $25,000 in loans, the payment goes up another $300. Using the average 2017 loan value of $39,000 and doing a crude estimate, the average required payment is $318 per month or about $3,800 per year. Is it worth it?
From the Bureau of Labor Statistics, in the second quarter of 2017, workers without a high school diploma earned $515 per week, workers with a high school diploma earned $718 per week and bachelor’s degree holders earned $1,189 per week. Note that this includes all years of experience. These numbers equate to $26,780, $37,336, and $61,828 annually respectively. Using the monthly payment of $318 per month in the paragraph above, the college grad should be netting $58,012 per year after paying for the collage loan or over $20,000 more per year than the high school graduate, taxes not considered.
The problem with this argument is that it is based on statistics and it is really not starting salary. According to Karsten Strauss of the Forbes staff, the domains of history, English, psychology, special education, elementary education, anthropology/sociology, social work, and pre-K and kindergarten education has starting salaries ranging from $38,631 to $35,626 in 2016. Averaging and subtracting the student loan payment above, the result is $34,804. In contrast, an average of the median base salary (be careful here, it is median which is sometimes cited as average) of the 50 highest college majors is $45,544 per year.
When you look at the numbers and overcome the headache, certain conclusions emerge. First, the need for more education and training continues to grow beyond the high school level. Second, costs become more and more complex with the greater burden being placed on the student. Third, increasing the efficiency of the entire educational and training system could help but the complexity of the system and debate over essential elements suggests slow evolution. All of these imply a need for greater focus on the HOW. How do we both improve efficiency and reduce the cost burden both to the student and to society?