Rising tuition and student loan debts mean that more students are dropping out of or never go to university. Obama’s plan is a big part of the solution
In the United States today, the odds of getting a degree are more tightly linked to family income than ever before, thanks to skyrocketing college costs and insufficient and misallocated federal and state financial aid funds. Although the federal government distributes about $170bn a year in financial aid to many types of students attending many types of schools, many low-income families still have to pay too much. Low-income families often end up paying about 40% of their family income for a member to attend community college – and, for four-year colleges, the bill can add up to a whopping 59% of a family’s earnings. Even middle-class families may be asked to spend or borrow a quarter of their annual income to finance one child’s attendance at a public university, while the costs of a private one are yet higher.
As a result, many families of modest means are unable to afford college. Students from middle- and low-income families have also become more likely to drop out from public colleges and universities, leaving with debts they can’t afford to pay back rather than degrees. But these are more than just personal tragedies: they represent a significant loss to America’s economy and competitiveness for decades to come.
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