High Cost of Higher Education

The increasing cost of higher education forces many Marylanders to borrow large sums to finance their education, creating a drag on Maryland’s economy and workforce. The high cost of college does not reflect the values of Maryland and the policies that helped make the state great.

As the price of education has increased, fewer people can afford college and the majority of graduates have student debt. In 2000 only 38 percent of college educations were financed by loans compared to 50 percent in the past four years. To make matters worse, workers now face stagnant wages and an economy still recovering from high unemployment. Their debt and the weak labor market leaves workers vulnerable to economic disaster and keeps them from purchasing a home or saving for retirement.

Maryland has done a better job than most states at keeping the cost of higher education relatively stable in recent years, although prior to the recent tuition freeze Maryland colleges and universities saw significant tuition increases. Elected officials in recent years have understood the importance of keeping higher education affordable and the benefit it has for Maryland’s economy and work force, although state funding has decreased since 2008. However, this year many state colleges and universities had to implement a mid-year tuition increase due to a decrease of $40 million in state funding this year.

Many Marylander’s will need an advanced degree in order to work. Nationally, of the 30 careers projected to have the largest job growth from now until 2022, over half of the jobs will require at least an associate’s degree, with 14 jobs requiring at least a bachelor’s degree. Maryland jobs often require graduate education. With strong healthcare, government, cybersecurity, and biotechnology industries we have the highest concentration of employed doctoral scientists and engineers.

The earning potential for jobs requiring a high school diploma or less or a technical certificate is dramatically less than jobs that require a college degree. The median earning for jobs that require some college is $65,355 compared to just $28,430 for occupations that don’t. Over a lifetime, the difference in earnings is staggering so it is no surprise that the demand for higher education has increased.

Additionally, it’s beneficial for Maryland to have workers with higher wages. Higher wages mean more tax revenue which allows the state to continue its investments in public safety, health care, and transportation, all of which benefit people, communities, and the economy. When workers’ wages decrease, so do the state revenues, a truth we are currently living through.

For over half of those who wish to attain a college degree, a loan is the only way they can do so. The Federal Reserve Bank of New York ranked Maryland as having the highest student debt in the country. Even when students receive scholarships and grants, other expenses makes loans necessary. Increased student debt becomes an even greater problem for those who do not complete their degree. Students who do not complete their degree or certificate are more likely to default on their loans.

For those who did complete their degrees, they are graduating with increased debt into an economy of stagnant wages. Incomes in Maryland fell between 2009 and 2013 and wages have only recently begun to rise. Recent grads will have to stretch their dollars even further to make ends meet and pay off their loans. As a result, many will put saving for retirement or a home.

The career necessity of an advanced degree confronts Marylanders with a tough decision: take on student debt or forgo the degree, limiting lifetime wages and the chance for economic mobility. We need college affordability and we need it now. Funding for higher education should be a priority in Maryland so workers and families can fulfill their economic potential.

Today’s blog post is part of our State of Working Maryland series looking at demographic and economic trends in the state. Previously, this has been an annual publication. This year we will instead publish occasional blogs and research briefs on topics affecting working families in Maryland.