Yesterday U.S. Senator Ron Wyden (D-Ore.) introduced legislation to give college students ideas about future earning potential as a way to make decisions about how much debt to assume.
Currently students make decisions about college based largely on parents’ income and their own comfort assuming debt. But figuring out how much debt is appropriate is sort of mystery, a mystery that can lead to horrible mistakes.
Students know that college is expensive, but they don’t know what they’ll actually earn later.
The bill introduced by Wyden could provide students with a little guidance. The Student Right to Know Before You Go Act will require academic institutions to report to the U.S. Department of Education information about their:
1.Post-graduation average annual earnings;
2.Rates of remedial enrollment, credit accumulation, and graduation;
3.Average cost (both before and after financial aid) of the program and average debt accumulated;
Current regulations require academic institutions to report extensive information to the Department of Education. The Wyden bill, however, would force institutions to report about student debt responsibilities and outcomes.
Here’s Wyden discussing his bill:
Now this bill only goes so far. The greater problem here is the debt itself, not the lack of information about salaries. Furthermore, America’s academic institutions do not exist for job training; they exist to educate students. Ideally, colleges should be totally unconcerned with graduates’ salaries.
But in the real world students and families are assuming debt to pay for college. The average college senior now graduates $25,250 in debt. And debt must be paid out of future earnings. As long as the current debt-based payment exists to fund higher education, it makes sense to provide students with as much information about financial matters as possible before they make choices about college attendance.