The numbers say it all: Since 1985, the price of college has increased a staggering 538%. Average student loan debt is approaching $30,000 per grad. And more than 50% of recent grads are either jobless or underemployed.
To many observers—not to mention debt-wracked, struggling graduates—these statistics suggest one thing: Higher education in the U.S. is broken.
So how did we get here, and what can be done to remedy the situation?
To try and glean some possible answers, we chatted with Andrew Rossi, the director behind the new documentary "Ivory Tower." The film's premise is certainly apropos: It's an in-depth investigation into whether a four-year college degree is still worth the cost.
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LearnVest: What inspired you to create a documentary on higher education?
Andrew Rossi: After I finished my last film, "Page One: Inside the New York Times," which looked at the crisis in the newspaper industry and the forces of digital disruption, I wanted to explore another sector that was on the precipice of similar change. And higher education seemed like one that was really ripe for investigation.
It also presented a unique opportunity to challenge my own personal views: I studied history at Yale, and for me, college was such a valuable and rewarding experience. I use a lot of the critical-thinking skills I learned there in my current job as a filmmaker.
And I am the son of immigrants who worked very hard to pay for me to go to school, enabling me to emerge as a first-generation college graduate without any student loan debt.
So, for me, going to college was a 100% win. But I wanted to find out why people like Peter Thiel [co-founder of PayPal] are now offering students $100,000 to drop out [in order to pursue research or launch their own start-ups].
Based on your research, why have college costs and student debt ballooned so rapidly?
Tuition rates have risen by 1,120% since the 1970s, and student loan debt is now approaching $1.2 trillion. It’s interesting to look at where these figures spike, in light of the historic and political context.
State funding of universities declined by about 40% in that same period, and that’s one of the key drivers that has caused schools—particularly public ones—to raise tuition to compensate for that decline in funding.
Politically, this is also a period when many conservative governors began suggesting that the state should not be involved in "subsidizing" intellectual curiosity. That’s a direct quote from Ronald Reagan when he was governor of California! So there was a shift away from viewing higher education as a public good that contributed to the economy as a whole. Instead, the view was that higher ed was a private good that would lead to individuals earning higher salaries over their lifetimes.
As state funding declined, the student loan industry stepped into the void. So for institutions, the emphasis turned to how to attract these dollars. That’s the beginning of the cost spiral, in which colleges are trying to lure student loan dollars to their campuses by creating perks or amenities, like luxurious dormitories or research labs that attract rock-star professors who have little actual interaction with the students.
Those who have student loans face a set of rules and regulations that are almost Dickensian in their strictness.
How do you see the student loan crisis personally affecting young people?
In the film, we spoke with Stefanie Gray, who graduated Hunter College with a master's in geography—and $140,000 in student loans. But she struggles to find employment. And she won’t even begin to think about starting a family, because she has private loans, which, unlike federal loans, can actually be passed on to her heirs.
As it is, those who have student loans face a set of rules and regulations that are almost Dickensian in their strictness. Borrowers are not able to expunge those loans in bankruptcy, unlike other forms of debt. And when they default on their loans, the interest that accrues for that period of default actually gets added to the principal so that the entire loan grows at an exponential rate. That’s one of the reasons we’ve seen debts grow so large for young grads.
In the film, we also spoke with Anthony Carnevale, who is the head of Georgetown University’s Center on Education and the Workforce. He explains that when you have $100,000 in student debt, that’s really the point at which many grads start to feel that it wasn’t worth it. They feel they were ripped off.
Let's talk solutions. How can colleges deliver high-quality education to millions of students at affordable rates?
In some cases, it helps for the government to step in. President Obama just signed an executive order extending a program that caps payments on student debt at 10% of monthly income. And that seems, to me, like a great solution—bringing the burden of student debt into a proportionate relationship to what people are able to afford.
As for bringing costs down, schools like Wesleyan University recently committed to not increasing tuition more than the rate of inflation. I’m not sure that will walk us back off the ledge, but it’s one doable step.
Could Massive Open Online Courses (MOOC) be a solution?
When we were making the film in 2013, it was considered the year of the MOOC, with the idea being that these are college classes that are only offered on the web. And so we were interested to see how that would pan out. However, what became clear is that courses that are delivered exclusively online, without any form of in-class instruction, are not successful. We saw pass rates of just 25%, which is abysmal.
But then we looked at an edX experiment at Bunker Hill Community College, which offered a hybrid model. Students could watch videos of an MIT professor deliver lectures online and then come to class, where an instructor would offer encouragement and clarify lessons in person. In that context, the MOOC structure comes much closer to fulfilling the promise of high quality and lower costs.
Can you unbundle what you get in college—the peer network, the skill sets—without the $60,000 price tag?
Some argue that campus life teaches "soft skills" that are necessary for success. What do you think?
One of the reasons I wanted to make this movie was to get at the core experiences of college, which are academic but also social. They are about peer-to-peer interaction and character formation.
For example, we interviewed students at Spelman College, the historically black women’s school in Atlanta. Students there are obviously learning about their majors academically, but they are also having really important experiences being in an environment with other successful African American women. They talked about the value of being with these role models, and being able to have discussions about their identity in contemporary society. It has an impact on them that is almost spiritual.
The question is whether that experience can be delivered in a cost-effective way to other students. Can you unbundle what you get in college—the peer network, the skill sets—without the $60,000 price tag?
There's evidence that employers are still vastly biased toward candidates with four-year degrees. Do you think that's shifting?
A college degree is still the key to many jobs. And it’s at the root of this really important statistic: Those who have a B.A. earn, over their lifetime, $1 million more than those who have only a high school diploma. That’s just a really powerful defense of the value of going to college.