40 Acres and a College Degree

August 17, 2005
By David Michael Rothschild

Around this time in 1787 the final draft of the Constitution was sent to the individual states for ratification. It was before trains, planes, and automobiles, electricity and computers, and the emancipation of the slaves, universal suffrage, and the civil rights struggle. In case you are not strong in math, that moment was 218 years ago.

While I have the utmost respect for the remarkable clarity and insight of our Founders, I find it reprehensible that anyone could conclude that all major government thought peaked 218 years ago. The so called "strict interpretist" or conservative view of government is as enlightened and reasonable as the fundamentalist religious view that seeks to carve out detailed modern laws and instructions from a 3,000 year old dogma.

One of the many issues on which conservatives use 18th century thought to block pragmatic debate is the evolving American Dream. From its inception as a string of European colonies, America has thrived on the American Dream. The American Dream is equality of opportunity, the ability of any person to rise from the depths poverty to the highest levels of success (whatever that is).

For 400 years, America has been a beacon of hope to those who wish to rise up and make a better life for themselves and their families. 218 years ago, that dream was based on an agrarian society. As recently as 140 years ago, the concept was as simple as "40 Acres and a Mule" (and a great deal of sweat). Yet, unless those 40 acres are sold immediately for development rights, 40 acres of farm land and a mule are very unlikely to be profitable to most Americans in 2005.

Still, conservatives continue to fight against government funded development (education, vocational school, job training, etc.) because they advise that anyone with enough resolve can accomplish anything, no government needed!

There are literally thousands of variables to consider when calculating lifetime income and sex, race, religion, inheritance, and education level are just a few. Yet, with a flatter world economy, both domestically and internationally (as Thomas Friedman illustrates with his relentless admonishments over China and India's growing strength), education will continue to gain more importance as a key ingredient to success.

For the American Dream to be relevant in the 21st century, it must be based on education as the main platform. The U.S. Census Bureau reports that the median lifetime income of people with college degrees is 1.73 times that of high school graduates. They also conclude that this number has been rising precipitously over the last few decades. 35 years ago, a college graduate earned just 1.22 times the average high school graduate.

Even more startling - or daunting - for college students is the continued income gap for higher levels of education. While a college graduate can expect to earn 1.73 times as much as a high school graduate during his/her lifetime, a masters graduate earns about 1.98 times a high school graduate, and a professional school graduate averages 3.36 times a high school graduate, or nearly double a mere college graduate.

There are also numerous unquantifiable benefits of a college education not just to the individual, but to the society as a whole, ranging from lower incarceration rates, to higher productivity, better health, and higher levels of volunteering in the community.

Higher education, the platform of the American Dream, is becoming more expensive. The College Board organization determines that net cost of sending students to four year colleges by adding together the tuition, fees, and room and board and then subtracting federal and state tax breaks and state and institutional grants. The Board concludes that from the 1993-1994 school year to the 2003-2004 school year, the actual cost of attending college (in 2003 dollars) has increased from $6,200 to $7,200 per year for a public school (a 16% increase) and $14,700 to $16,700 per year for a private school (a 14% increase).

Furthermore as the prices rise the College Board notes that "these averages conceal the reality that the distribution of grant aid has changed in recent years, with a declining share of grants being awarded to the lowest income students." In 1992, a student who scored in the middle third on their standardized tests had 59% chance of going to college if he/she were in the top quarter in family income, while those in the bottom quarter had just a 33% chance of attending college. Moreover, those in the top quarter received a bachelor degree within 6 years 77% of the time, versus just 54% for those people whose families are in the lowest quarter. Wealth makes it much easier to matriculate into college and much easier to graduate once at college.

America's concept of "pulling oneself up by the bootstraps" needs to be broadened to accept the increasingly important role of higher education in success. It is nearly impossible to have profound upward mobility without proper education, and broadly affordable higher education is impossible without large amounts of government aid.

Just consider a world with only private schools. Immediately the average cost of attending schools increases over 132%, and that is assuming that government grants still hold. Now consider that the reason that public school tuition and fees are advancing much faster than private schools (51% versus 36% over the last 10 years) is because they are relying more on tuition and fees and less on government aid (government aid has fallen from 50% to about 36% of the budget of public colleges in the last 20 years).

This decrease has become more extreme in the last few years as George Bush has grappled with new ways to pay for his War in Iraq/Tax Cut for the Extremely Wealthy policies. Cuts in discretionary spending on science and research are indirectly affecting colleges, while cuts in state aid are being felt directly at the state universities. Yet our problem, the country's problem, is that we have been too busy fighting these incremental battles to take a giant offensive.

Rising costs of college cannot be solved with fractional changes. Lowering the increasing rate of college from 16% to 14% will do nothing. Every year we allow higher education to be unaffordable or cripplingly expensive, the divide between the wealthy and middle class grows more distinct and the American Dream loses a little bit of its luster.

We need to drastically decrease the cost of college, both through direct funding and increased grant aid to the lower and middle classes. The next generation needs to be provided higher education in the same way that we are currently provided high school. We need to shift higher education from a luxury to a right, and it needs to be done at a time when government spending is not only ignoring this urgent plea for investment in our future, but straddling our future generations with the burden of a huge debt. If changes are not made, disparities in higher education (exacerbated by a rising debt burden) can cement a terrible cycle of inherited wealth where the only way to live the American Dream is if your parents lived it before you.