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Economists Say College Costs Hurt Economy

FILE - U.S. President Barack Obama, Jan. 16, 2014.
FILE - U.S. President Barack Obama, Jan. 16, 2014.
Economists Say College Costs Hurt Economy
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Hello from Washington, and welcome to As It Is, a program from VOA Learning English! I’m Catherine Cole.

The cost of college continues to rise, making higher education too costly for some. Many students are turning to online classes as a substitute for traditional colleges. We hear more about the digital college revolution later in the show.

Also, lawmakers in Washington continue to debate education issues, including the interest rates on student loans. Students who take school loans graduate owing an average of $26,000. But some economists say the real issue is controlling the cost of college. They say these high costs are hurting the whole economy. Onka Dekker reports.

College Costs Raise Concern for Lawmakers and Students

Joshua Jordan earned a doctorate degree in physical therapy.

“I am currently in debt for $210,000.”

Joshua Jordan has eight times the loan debt of the average student. He says he has sometimes needed to work two jobs to pay his bills.

For the past 30 years, college tuition has been increasing at twice the rate of inflation. Universities say decreasing financial support from state governments forces them to charge higher tuition. Private colleges now charge an average of more than $30,000 a year.

Terry Hartle speaks for the American Council on Education, which represents thousands of colleges across the United States.

“It’s a terrible conundrum that we face as a country. We want more and more post-secondary education. We want more focus on academic quality and graduation. At the same point, the funding sources for higher education have been diminishing for a generation.”

Experts worry that the high cost of college makes it less likely that good students from poor families will attend college. This means fewer scientists, engineers and others who could help increase economic growth.

And a survey shows that some students concerned about repaying thousands of dollars in loans are delaying marriage and children. Peter Mazareas is with the College Savings Foundation.

“These students just will not contribute to the economy. They will go home and live at home. They won't buy cars. They won't invest in housing, so there is a real multiplier effect that is short term.”

Georgetown University labor economist Anthony Carnevale says the current system cuts economic growth for the whole country.

“The effects on economic growth are substantial. If we had kept up with demand for post-secondary talent, economists estimate that we would be at about $500 billion or more per annum in gross domestic product. That is, people would have more money to spend. “

Meanwhile, physical therapist Joshua Jordan says his family is not wealthy and could not have paid for his education.

“There would have been no way I could have created a career for myself that I wanted to do without the use of student loans.”

So for Joshua Jordan, his large debt was worth it.

The Department of Education recently reported that today one third of Americans between the ages of 25 and 29 hold college degrees. That is an increase from one fourth in 1995.

I’m Onka Dekker.

You are listening to As It Is, from VOA Learning English. I’m Catherine Cole.
American colleges are facing what some people are calling a “perfect storm” of problems. College costs are rising, and there are not enough jobs for all the students completing study programs. Yet employers say they cannot find enough workers with technical skills. Finding a solution to these problems can be difficult. But, as VOA’s Avi Arditti reports, one solution may be found in the growing number and quality of online classes.

U.S. President Barack Obama gives remarks at an event on Expanding College Opportunity inside the Eisenhower Executive Office Building on the White House complex in Washington, January 16, 2014. REUTERS/Larry Downing (UNITED STATES - Tags: POLITICS E
U.S. President Barack Obama gives remarks at an event on Expanding College Opportunity inside the Eisenhower Executive Office Building on the White House complex in Washington, January 16, 2014. REUTERS/Larry Downing (UNITED STATES - Tags: POLITICS E
Online Classes Growing in Popularity

Such classes might revolutionize colleges the way the Internet has already changed music, publishing, sales and other businesses.

“This is pretty amazing.”

That is David Evans of the University of Virginia. He is teaching a computer science class on the Internet.

Many top universities now offer online classes. They teach everything from computer programming to the science of cooking. Many classes are at little or no cost. And they are restructured more often than traditional college programs.

That is important to the millions of students who learn technical and other skills from Lynda-dot-com. Lynda Weinman helped to launch the website. She spoke to VOA on Skype.

“We can come to market very quickly and we teach transient skills, so a lot of software is changing constantly or new software is being invented, and those sorts of things can’t easily make their way into college curriculum.”

At most colleges, a professor or teaching assistant gives a lecture to students, who then do research, study, and homework alone. Student and blogger John Haber says online classes change everything around.

“They’re watching the lectures at home as homework, recorded lectures, and then when they get to class, they’re having more active discussions, or interactions with the teachers or working on projects.”

John Haber said on Skype that he is taking enough online classes to earn a four-year college degree in just one year.

Experts say the new technology will have a major effect on colleges. Some predict future classes may be a mix of online lectures and professors helping students work through difficult problems in person.

Georgetown University labor economist Tony Carnevale says he would welcome these changes. He says a college education has to be less costly and lead to skills needed by employers.

“It's really quite clear that more and more people need post-secondary education and training and a lot of them aren’t getting it. And in cases where they do get it, it doesn't lead to gainful employment. Or it leads to jobs where they don’t fully use their talent.”

Chris Cullen is a college marketing expert. He says competition from online schools, and concern about costs, will change universities.

“The consumer demands that you tell me why, give me a reason, to believe that my tuition money is best spent at your institution. What is the return on my investment? What’s your value proposition?”

Chris Cullen says top universities with strong public images may expand in an online world. But, he says, less discriminating, less famous schools may struggle to get the interest of students.

I’m Avi Arditti.

I’m Catherine Cole. That’s our show for today.

VOA world news is coming up at the beginning of the hour Universal Time.

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