It's an annual rite of passage for college students: signing promissory notes for federal student loans. And as they begin doing so for the fall semester, Congress is poised, finally, to end the uncertainty about the interest rate that borrowers will have to pay.
The 11 million students each year who rely on the loans to finance their ticket to the American dream need to know the terms of their indebtedness. So when the House of Representatives votes this week, it should pass the bipartisan compromise that would for the first time tie interest rates on college loans to the cost of federal borrowing.
But Washington's annual rate debate misses the point. The urgent issue for future students and their families is the skyrocketing cost of a college education.
In the 2010-11 academic year, the bill for tuition, room and board averaged $13,600 at public schools and $36,300 at private, not-for-profit institutions, according to the federal government's National Center for Educational Statistics. Over the preceding decade, inflation-adjusted prices rose 42 percent for public schools and 31 percent for private ones. That escalation has left families burdened with $1 trillion in student debt, more than Americans owe on their credit cards. The burden has grown as states, including New York, decreased their relative share of college funding.
Colleges and universities have to do more to keep higher education affordable. In fact, they have little choice, given the slackening demand for what they sell.
College enrollment fell 1.8 percent in 2012, accelerating a drop that began in 2011 after a 14-year run of increases, according to the National Center for Educational Statistics. As Congress debates reauthorization of the Higher Education Act -- which sets policies for $150 billion a year in federal college student aid -- it should look to use that financial clout to contain the cost of college.
Higher education hasn't been transformed by the economic forces, such as globalization, computerization and recession, that have driven revolutionary changes in other industries. But colleges haven't been completely immune. The growth of online courses and greater reliance on adjunct instructors in place of full-time faculty, are attempts to adapt. But they have to do more.
That may mean awarding credit for online courses taught to tens of thousands of students at a time by superstar faculty from other institutions. Or providing shorter routes to a degree, via demonstrated knowledge unconnected to course work or streamlined requirements. Faculty will have to teach more courses. And schools should consider eliminating cherished, but costly, sports programs, and stop building over-the-top gyms and better-than-home dorms in the arms race to attract students.
Familes can drive the cost-cutting by becoming savvier consumers. They should cast a cold eye on the return on investment universities offer by comparing their cost, graduation rates and graduates' success landing all-important first jobs.
And while harried students don't want to hear it, completing a four-year degree in four years is the surest way to limit costs. In New York, only four in 10 students managed that feat in 2010.
Congress should look to drive some of these changes when it reauthorizes the Higher Education Act, which expires at the end of the year. Schools with abysmal graduation rates should have federal aid for students curtailed or even eliminated. Aid policies should encourage students to complete their studies much faster.
Congress should also ask some uncomfortable questions. Are too many people going to college? Should aid policies encourage more vocational education? And what role, if any, does the availability of $150 billion in federal financial aid play in driving up college costs?
Washington needs to stop skirmishing over student loans and get on with the defining battle to keep college within reach for the middle class.