...Economics of a College Drop Out Research Term Paper By Eleazar Rangel 7/02/2013 South Texas College Econ 2302 Professor Oscar Plaza A. Introduction: Economics of a Dropout High cost of college and several other factors are causing the number of college dropouts to rise drastically. Understanding why this numbers are soaring is important. For example why has the rise of the cost of college nearly sextupled since 1985? Or why has the student loan debt held by Americans surpassed the $1 trillion mark? In addition to answering these questions, I will discuss the different arguments, opinions; facts regarding the toll college dropout play in this economy, and finally my final point regarding this college dropout syndrome. B. The issue: Why are students dropping out of college? This is an important topic because what factors cause students to drop out of college? According to a study from Harvard University, only 56% of students who enter college or universities graduated within a six-year period (only 29% who enter a two-year program graduate within a three year span). A main factor, according to the Harvard study, is the rising cost of the college education. Since 1985 the amount of student loan debt has surpassed the $1trillion mark and cost of a college education has sextupled. The graph below, by the Federal Reserve Bank in New York, shows the difference in price changes since 1985. As you can see in the graph college tuition and fees has drastically...
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...Republican, didn’t worry that some poor kid might benefit from access to “free stuff,” nor did he believe that the children of wealthy elites should be excluded from the universal nature of the program. For him, education was the basis for full economic and political participation, and full participation was the basis for all prosperity. An education should be available to all regardless of anyone’s station. Today, there is universal...
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... Rising cost of college education People who possess a degree have a better chance of finding successful careers. However, a college education has been getting increasingly more difficult by the sky-rocketing costs of college tuition. The authors of “Administrative costs in higher education: how fast are they really growing?” state that: “The College Board says the average tuition and fees at public four-year colleges and universities increased by 27 percent beyond the rate of inflation over the five years from the 2008-09 academic year to 2013-14. After adjusting for inflation, the cost of tuition more than tripled between 1973 and 2013” (Hedrick et al 124). The tuition cost now becomes a cause of considerable public concern because it is very high compared to how the economy has been and how wages and financial aid have not risen with the cost of tuition. With the cost of college rising, many have asked a question: Is a college education worth the cost? Anyway, it cannot be denied that a college education always remains an important investment for the future. Tuition is usually the first thing that comes to mind when planning for higher education. It is the largest portion of the bill when attending a college or university. Tuition is a term that refers to tuition, fees, and room and board charges per student. According to Robert Martin, the author of “Why tuition costs are rising so quickly?”, for the 2006–2007...
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...believe that in order to be successful you must have a college degree. While a college education has affected our great American culture and economy, the idea that college is the “right” and “responsible” decision for those who are pursuing the American dream is outdated and borderline dangerous. Today, many opportunities are given to everyone to receive higher educations. But this does not mean that everyone should attend a four year college. Everyone was not created equally in their educational abilities, everyone should not be pressured to attend a four year college but should be encouraged to go to a community college, vocational school, or job experience instead of being looked down upon in...
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...the government should be involved? Why or why not? Yes. I agreed with the actively involvement of the Government in certain markets. And markets are great tools for advancing the welfare of Americans over its history. The purpose of government interferences defines boundaries between what aspects of life should be a part of market and which should not. Governments can also use regulations to lessen risk, promote efficiently by correcting markets failures and externalities .Government regulations can enforce property rights, stimulates anticompetitive activities and increase competition. Government intervention can be appropriate and successful by eliminating monopoly, facilitating loans to students and business, establishing ethical rules to avoid corruption and so forth. But in contrary of that, public spending could negatively impact the economy, small business, others products and the consumers. Today our students are suffering some implications from their federal loans. “Student debt has nearly tripled since 2004, according to the Federal Reserve Bank of New York, and college students are borrowing larger amounts. And recent graduates are finding fewer job opportunities and lower or stagnant wages” (Pant, 2013). Therefore, there are many of controversial issues because some public investments and programs will not have efficacy and eminence results in our society Are Student Loans Destroying the Economy? No. But by trading cars for college (and homes for homework), some young...
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...at current levels of production, the U.S. economy will have a shortfall of five million college-educated workers by 2020.” (Bergeron & Martin). This shows that the cost expense of college causes five million college educated workers to decrease. Five million people who do not have a post-secondary degree due...
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...3/9/2014 | Jacquelyn Q | Summary Thousands of recent college graduates with medical educational loans to pay off are putting their plans for better lives on hold. Medical education tuition and medical student debt have increased dramatically during the past two decades, even though loans and grants are available on conditional terms, students continue to find it impossible to receive a medical education. As an investment, medical education is an excellent choice; its net present value is more than a million dollars. Cost is nevertheless a strong deterrent to potential physicians, such as myself. If tuition and indebtedness continue to increase while physician incomes does not, medical schools may have increasing difficulty recruiting qualified medical students. If tuition continues its rapid increase, potential physicians may find it extremely difficult to repay their medical school debts, and some students may be deterred from attempting a career in medicine. These decisions could have a devastating impact on our health care system. Recent increases in medical education tuition and high levels of indebtedness among graduates are matters of concern to me. Although concern about rapidly increasing costs is seen throughout higher education, the situation in medicine appear especially troubling in view of the much higher levels of indebtedness and the lengthy training required before the graduate can begin earning a professional income (healthaffairs.org). The...
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...encompasses a discussion concerning college and its perceived merits or demerits. To this end, the thesis will seek to explore the issue of whether its benefits outweigh its inherent costs. A narrative relating to college degrees postulates the necessity of the latter to have a good career. The narrative has been formulated and affirmed by the media, the business community, and the government. In a recent speech, President Obama blatantly stated that now more than ever, the college degree was a ticked into the middle class, a good job, and a good income. He goes on to say that the degree gifts the graduate an element of security that keeps them employable. The latter is a result of the perception that the degree creates. Potential employers view individuals with degrees as malleable and capable of acquiring new skill sets. On the business front, there is an upsurge of demand for skilled workers in recent years because of dramatic technological advance. Ergo there is an augmented demand for graduates who can carry out the tasks that a high-tech economy needs. The media has been used to highlight this upsurge and often unwittingly, create pressure on parents to send their children to college. While parents deal with all the information heralding college education as a crucial investment to make, they also appraise the information against the backdrop of college costs. In recent decades, the cost of higher learning has exploded. Numerous colleges charge an almost exorbitant fee...
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...College Education is Worth the Investment All kids are pushed to do their best and work hard in school. Having a work ethic is something that is always emphasized when children are young and learning the importance of diligence in school. We are told that if you work hard you will reap more benefits in your lifetime. Hard work is a key to doing well in school and work. Being inherently intelligent will obviously open doors but having merit and putting that in your everyday work will get you far as well. It has been shoved down our throats that a college degree is a way to secure a job and find something that will allow some stability in life. In a time where everyone has seen families struggle with finding any sort of stability, it is something that this generation definitely strives for. The economy is said to be recovering, and unemployment rates dropping. We are told that hard work helps guarantee a job, security, and more wealth in life. Due to the economy and high education costs it is not always so obvious whether the hard work put forth in college will pay off in the end. College is supposed to guarantee a sort of safety net for a safe middle class life, and although this is not always the case the costs and time spent in college teach valuable lessons that a student can carry with them and apply to the work world when they get their degree and in other aspects of their life. Some people think that they will not be able to get into college based on grades...
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...bachelor degree recipients at four-year for profit institutions carried education debt of $30,500 or more during the 2007-2008 academic year, compared with 24 percent of those at private four-year institutions and 12 percent at public four-year schools” (Clemmit). A college education is meant to prepare people for a desired career where they can hope to attain the American Dream but unless you come from a wealthy family, paying for this education could take the rest of your life. With constant budget cuts in education, universities are forced to increase tuition prices dramatically which results in students graduating with large amounts of debt and no guarantee of a job to pay it off. Raising tuition prices is unfair to the students hoping to accomplish their dreams and live life the way they choose. Universities are taking advantage of people coming out of high school willing to do whatever it takes to prepare themselves for the career they desire. Something should be done to stop these schools from raising prices so high that taking a loan out is a common practice to pay for school. American families are having a hard enough time as it is with the recession and the housing market fallout to even consider putting more debt on their already sinking credit. The government should recognize that with tuition cost rising so much, less people are pursuing a higher education. Education is one of the most important aspects of a first world country. If a student is...
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...Over the last few years, there has been a debate as to whether a college education is worth it. With the sky rocketing debt in student loans, the employment rates, and the time dedicated some people believe that it is not worth the time nor the money. Many people have many different views on college education. From recent studies and statistics, the employment rate is higher for a college graduate, depending on the degree, than a person who has little to no college credits. Also, the money a college graduate makes is high than that of a high school graduate. While the time dedicated may be too much for some individuals, in the end it all pays off not only because of the hard work but also because of the experience. Obtaining a college degree is worth it because of the employment rates, cost of expenses, time dedicated, and experience. There are different types of degree; Associate’s, Bachelor’s, Master’s, and Doctorate. An associate’s degree is a degree that is common at junior or community colleges and trade and professional school. The requirements to complete an associate’s degree is about 60 hours of course work, which...
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...relied on Federal Pell Grants to help fund my tuition fees. This regulation change won’t affect me directly, but my sister-in-law is a freshman in college and she receives this type of grant. 2. The proposed regulation forbids a student from receiving two successive Pell Grants in a single award year 3. My comment is that in the recent years, many people have lost their jobs and still to this day have not found work. Most of those people have college-aged kids; and with their savings liquidated to live, many of them cannot support their children’s college costs. There are student loans but with interest rates rising and not enough jobs opening for recent graduates, it’s not ideal to burden the future of America with debt. Americans must remain competitive with other industrialized nations with their graduates, and most of those foreign graduates migrate here and compete with our own American educated graduates. It is to everyone’s benefit that our country supports our children’s education. As they progress, we all progress. I wish to them repeal this proposed regulation. 4. This expires on Jun 18, 2012. 5. a. After I have submitted my comment, if the rule passes, I, or any of the public community, can access the data or analysis on why the rule passes since it will be public information. If I don’t think that the reasons of why the regulation passed, then I may bring it up for judicial review. I may challenge this regulation legally if I believe that this law is inappropriate...
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...Persevering long enough to graduate can be just as challenging. Data from the U.S. Census Bureau revealed in 2000 that one in three Americans drops out of college. This is an increase from the 1960s when one in five discontinued his or her studies. Some studies indicate that a considerable proportion of college dropouts come from low-income families. The U.S. Department of Education found that 41% of low-income students enrolled in a four-year institution managed to graduate within five years. For higher income students, this jumps to 66%. Of the low income students that did not return, 47% left in good academic standing. Though research links financial difficulties to dropout rates, there are a number of factors that account for why students decide to leave school. Students tend to drop out because their expectations of college—academically, socially, or both—don’t match up with the reality once they get there. They also suffer from lack of motivation, inadequate preparation, and poor study skills. The National Center for Education Statistics indicates that dropout rates are particularly high for African American and Hispanic students. Other student populations at greater risk of dropping out include those who are the first in their family to attend college, those who have limited English proficiency, and nontraditional students such as returning adult students. Few students who drop out eventually finish their education. Those that do return to college usually don’t do it immediately...
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...The topic of going to college has taken up mass discussions in family households, including mine, and is even a national debate. Even though there are different viewpoints about college most of them have to do with why you should go to college. But why so much talk? Well, the “talk” is about if college is worth the financial debt that is ball and chained to it, or even the experience that one might go for, and while college does cost a lot and may not be for everyone, the benefits of college outweigh the concerns because college opens up more opportunities. Coming from a college prep school, I know that people are constantly being compared to each other and that all falls under the category of how much effort you put into becoming successful....
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...From the SelectedWorks of Richard H. Serlin January 2008 Introduction to Student Loan Debt, with Information on Important Related Subjects Contact Author Start Your Own SelectedWorks Notify Me of New Work Available at: http://works.bepress.com/richard_serlin/15 Introduction to Student Loan Debt With Information on Important Related Subjects By Richard Serlin Student loan debt has become an extremely important issue in recent years. There are several key reasons for this. First, the amount of student loan debt taken on has skyrocketed to unprecedented levels. At public universities the percentage of students graduating with over $40,000 in student loan debt increased 18 fold between 1993 and 2004 – even using constant, inflation adjusted, dollars. In 1993 only 0.3% of all graduating seniors had student debt of greater than $40,000 (in 2004 dollars). By 2004 5.4% did. One-fourth of all public university graduating seniors in 2004 had student loan debt greater than $22,821. Half had student loan debt greater than $15,471. Median student loan debt increased by 108% between 1993 and 2004, and even adjusting for inflation it increased by 58%. Those obtaining graduate degrees can finish with over $100,000 in student loans. This debt is especially serious given that it is virtually impossible to discharge in bankruptcy. It would take a tragedy akin to being full body paralyzed in an accident to get it discharged under the current rules. On...
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