Future Economic Impact of College Enrollment

Not everybody needs to go to college is the short answer to your question, but somebody needs to go to college AI can't do all the jobs I'm Jane Kirstiston, and this is Way, the show that believes in love Except when that love leads to influencers illegally climbing to the very top of the Empire state builduilding and proposing marriage Here's Fox News. New York City specifically has an anti climbing ordinance, by the way. You can't climb a building over fifty feet high. That is a misdemeanor punishable by up to one year in jail plus a fine disorderly foring now. Great. Well, they can consummate a marriage in jail My opposition is not about love. That's about heights nameamely I don't like them On today's show, we discuss how the Trump administration is making college more expensive with John Marcus Her Education Eeditor for the Heckinger Report Before we get into, All that, Here's what we're following today. Wednesday, july first So we're very proud of this. The country's very proud of it And you can do two things. You can locy it. you can show it. and I think the country should be very proud of it Ah yes, as an American getting ready to celebrate the two hundred fiftieth anniversary of our country, the thing I am most proud of. a retrofitted Boeing seven hundred and forty seven worth four hundred million dollars gifted to President Donald Trump by Qatar And Trump got to take his first ever trip on the new Air Force One today He flew to North Dakota to see the Theodore Roosevelt Pidential Libraryhe of its opening on Saturday. Gone is the trademark light blue hull that helped Air Force One blend to the sky The refurbished jet is painted to Trump's preferred color scheme of a navy belly and red and gold stripes. Like I said, I'm so proud Trump has had a lot planned for America's two hundred fiftieth birthday. There's the great American State Fair that's empty There's the gilding of everything within his line of sight And now the Atlantic is reporting the White House is considering quote, two hundred and fifty pardons for two hundred and fifty years The idea had not been put in front of Trump as of Friday, and a White House official told the Atlantic it may never reach the president But doesn't it sound exactly like something Trump would do Say goodbye to the House of Representatives, which has headed home for a nearly two week recess after House Republican leaders got absolutely nothing done Again All of this stems from President Trump's obsession with the Save America Act, which would radically change federal election law Last week, Trump scuttled a signing ceremony for a bipartisan housing bill saying that he wouldn't sign it until he got the Sve Act on his desk and his allies in the house for listening making it impossible to get votes on anything else, including defense spending Speaker Mike Johnson tried to get around this problem by attaching the SAV Act to a massive defense spending bill. That led to that bill getting voted down by Democrats who don't want to pass a save act, and Republicans who do want to pass a save actct, but Not like that So now everyone's headed home for the holiday weekend and more Furious and having done nothing. Once again Mike Johnson has the worst job in America It sure seems like we're in a progressive blue wave Democratic socialist Mayak Kiros beat repepresentative Diana Deet in a Colorado House primary on Tuesday. A stunning victory for the first time candidate against a nearly thirty year incumbent and another win for progressive challengers across the country At twenty nine years old, Kuros will also become the first Gen Z woman elected to Congress if she wins in November to put a finer point on it Curos was born the same year Duette was first elected to the House And that's the news. Let's talk about college It's summer break, but today is a start of big changes for colleges, universities, and you if you have student loans Because of last year's big Republican spending lawed debacled disaster adventure Also known as the one big beautiful lock There are new caps on student loans for graduate and professional programs as well as undergrad students And if you were enrolled in a Biden era student loan plan known as saving on a valuable education or save You need to look for other repayment options because the Trump administration is ending that program That's the micro of the situation facing colleges and universities right now The world of higher education is changing rapidly As many colleges and universities are raising their sticker price, others are closing their doors So to learn more about what's shaping the biggest changes impacting higher education, I spoke to John Marcus He iss senior higher education reporter and editor for the Heckinger Report. Welcome to W todayday Thank you for having me Now, somehow, And I say this, having gone to college like fifteen, sixteen years ago, I'm thinking it was really expensive then Going to college is now even more expensive and paying those costs is going to look differentifferent I know I got an email from the Department of Education about my student loan rates As of today The Trump administration's new student loan policies are officially in effect. Can you quickly walk us through the biggest changes Yes, that's correct. So the biggest changes are for about the seven and a h fivealf million Americans who are under what's called the Save program That was inststated during the Biden administration to help people who might otherwise not be able to afford to repay their college loans. Beginning today They are going to have to move to a different plan could cost them a lot of money depending on what plan they choose. So it's really important that people pay attention. this process. They have ninety days. They should hear also from the department. beginning today and they'll have a choice of a new plan That is likely to cost them a little bit more, but unless they pay very close attention, it could possibly cost them a great deal more. Why? likeike why why one, why was this change made Why will it cost them a lot more? if they don't pay attention? Why is a harder question? So let me start with the other question. The sort of portfolio of student loan programs that we have is there are a lot of different programs. They are kind of duplicative There was some legal challenges to the Sve plan from state attorneys generenal because essentially it meant that taxpayers We're filling the gap between what low income borrowers were able to repay and what the save plan sort of limited you were limited to repaying only five percent of your income So was it was connected to your income. The new plans are also connected to your income, but they won't be quite that generous. And it also won't be possible for you to get your debt discharged as easily. Under the safe plan, you could get your debt discharged potentially after ten years. Now it will be thirty years That's among the changes that people are going to face. But the most important thing is that they pay attention There is there are early indications that loan servicers are having trouble keeping up with all the questions that they're getting, having trouble answering them accurately There is a helpful sort of tool on the Department of Education website at studentaid. gov It's a loan simulator into which you can type how much you owe. and it will give you the options of various plans that you can pick, but it is really important that people pick them. by the deadline the end of September or else they'll be put into another plan arbitrarily You said that why these changes were made is a harder question. Do you have an answer Yeah, again, there were legal challenges to this proposal. There are people who argue that it shouldn't that once people borrow, as would be the case if you borrow to buy a house or buy a car or on your credit card, you have to repay it. You've assumed this debt U with the intention of repaying it So u allowing people to defer that debt pay a lower amount per month toward that debt. Ultimately, the difference was being underwritten by taxpayers. And so there are some arguments that that wasn't fair to the people who didn't benefit from student loans by getting a degree or credential. Is there a concern that these student loan changes will mean that fewer students go to college Yeah, that's a really interesting question. It depends how what we see happening over the next few months in terms of people defaulting on their loans The more I think that people hear about student loan debt, that have not yet enrolled in college, the more reluctant that they might be And what was interesting, if you remember back to the Biden administration and the pandemic period We were discussing student loans almost every day W the well meaning intention of helping people pay them But the ultimate effect of that was to remind people every day that there is almost two trillion dollars worth of student loan debt outstanding in this country. And the more people are reminded of that, the more they question whether they also want to take on debt to go to college So John I think that this gets me to bigger question about college right now. and also a pet peeve of mine, which is that people tend to be kind of hypocritical when they talk about college in some ways, and I'll explain We hear a lot from offten people on the right, but also sometimes liberals as well. that You don't really need a college degree, that it's less important now that AI has changed the game. All of the people saying that went to college I went to college. I loved going to college. I think it's great to go to college. I think that it is a great way to advance not just yourself by education, but also socially. If you're a young person heading into the workforce for the first time right now How important is it really to have a college degree, not with the kind of like Oh, you know, you won't be exposed to wokeness or something like that. But like what does it mean to have a college degree right now? To your point, many of the people who argue that you don't need to go to college also send their own kids to college And we hear from many of them who are critical of colleges lately for their purported sort of political leanings, but they still send their kids to college Not everybody needs to go to college is the short answer to your question, but somebody needs to go to college AI can't do all the jobs. And in fact, while you heard a lot of college graduates this spring booing speakers who said nice things about AI because those college graduates are facing a very difficult labor market especially at the level they're entering at entry level jobs There are huge shortages in many other fields that require university degrees, particularly healthcare semiconductor production massive shortages. And the reason is simple math. It's that we have a huge cohort of baby boomers who are retiring. The last baby boomers will be filing for Social Security in twenty thirty two. And we have far fewer eighteen year olds coming up through the pipeline to take those jobs Somebody needs to get degrees. and there are two purposes for this. One is for their own sake In most majors from most institutions, you will make more money with a university degree than without one how much more you'll make varies It's not as colleges would have you believe, a blanket reality that everybody makes more money who goes to college But the other reason that we need people to go to college is for the sake of our economy, We have a knowledge based economy. We have an international global rivals who are increasing college going while college going in the United States, that is the proportion of high school graduates who go directly to college in the United States has been going down reallyally quite dramatically, because of the concern about costs So somebody needs to go to college is the answer to your question We'll get back to my conversation with John Marcus in a moment for more on how college is changing in some big ways. But if you like the show, make sure to subscribe Leave a five star review on Spotifine Apple podcasts, watchatch us on YouTube, and share with your friends. more to come after some ads What today is brought to you by Delete Me You need to protect yourself from stalkers, scammers, and hackers, but you don't know how Here's how WWW d. join deelete me. com slash wad and dra code Wad You'll get twenty percent off deelete me Soet me removes your personal information that's being sold online In the age of AI, we're all especially vulnerable to scammers using your personal data that's floating around on the internet against you Have you ever Googled yourself and found your home address, phone number, or the name of a family member?'s Un satelling. But the good news is, Delete M can help That's why Delete mee was named the top pick for data rememoval serervices by Wirecutter. 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Whether you're buying equipment, expanding your team, or bridging cash flow gaps, ONDecks loans up to four hundred thousand dollars help make it happen fast. Rated A plus by the Better Business Bureau and earning thousands of five star trust pilot reviews, ONDeck delivers funding you can count on. Apply in minutes at onndDeck dot com d Depending on certain loan attributes, your business loan may be issued by Ondeck or Celtic Bank. ONDeck does not lend in North Dakota. All loans and an amount subject to lender approval. Let's get back to my conversation with John Marcus. You said something that was really interesting that I think is pretty key which is that there are fewer eighteen year olds who are coming up to the pipeline to go to college in the first place. And I think that that is something that if you're a college or university president you are very nervous about because despite the massive price tag actually The massive price tag and the straw bll might be tied A lot of colleges are struggling financially right now Is that because there just are fewer eighteen year olds that we've kind of reached a peak of the number of eighteen year olds who're going to go to college in say two thousand eight, two thousand nine, and it's downhill from there Yes The answer to that question is yes. The number of students in college is already down by almost two million since twenty eleven. On top of that, The number of eighteen year olds peaked last spring. So this fall will be the first year of a what's called a demographic cliff. A decline in the number of eighteen year olds, the total decline will reach thirteen percent, fewer eighteen year olds between now and twenty forty two. That's a huge problem for colleges. and you've begun to see them closing It is on top of other problems that colleges are facing, some political cuts in federal research funding. International enrollment is a big problem for colleges because they make a lot of money out of international students who aren't coming here anymore And as I mentioned a moment ago, the proportion of high school students who are graduating from high school has who are going directly to college has declined from about seventy percent at the peak to now closer to sixty percent and about ten years. That is a big drop All of those things, yeah, they're keeping deans and presidents awake at night, assuming that they still have jobs So something else that's interesting is that this The financial struggles seem to be a little bit uneven. So if you are a small college, you, if you're Oberlin or Kenyon, which are both in Ohio you might be struggling But if you're Ohio state It looks like you're more or less sitting pretty. So is it about the difference between big tier one research universities and small colleges? Wh is struggling more, who is likely to struggle more, and which universities are more likely to be in safer waters Flagship public universities are doing comparatively well in part because they're a good deal They're typically less expensive than a private nonprofits even more selective college or university they they receive state funding, although whether that will continue over the long term is a challenge that they're about to face Colleges that are in the most trouble right now are small, meaning their enrollment is fairly limited Tuition dependent, meaning they don't have big endowments regional, meaning they're not well known outside of their home state can't attract students from across the border And also single gender, of which there are still a number of single gender institutions and religiously affiliated. More than half of the college that have closed have been religiously affiliated. particularly affects rural areas where there are a number of small religiously affiliated tuition dependent colleges, there has been a big decline in the availability of higher education in rural America. There's sort of an imbalance in what's available to someone who lives in a city or suburb and someone who lives in rural America. But those are the kinds of colleges that are at risk You mentioned this a little bit earlier, but the US economy is changing really quickly If college enrollment doesn't go back up, what could that mean for the US in the next ten to twenty to thirty years? As you mentioned There are a fewer eighteen year olds, but we still have an economy that depends on people going to college We do, and the effect of this over time will be shortages in areas that do require university or college degrees and professional degrees. One of the other changes that takes effect today that we didn't discuss is the There is now a cap on borrowing for graduate and professional schools, such as medical or dental school. We have a growing shortage of physicians u dentists veterinarians, the kind of people that need professional degrees. There is potentially a benefit to capping what students can borrow for graduate school and professional school, which is that it might force colleges to lower the tuition which is very expensive at those schools In the short term, it will force people to find some other means of of support or fgo a career in one of those fields. cost there are colleges that As of this year, we'll cost in the six figures a hundred thousand dollars a year to get a degree. So Th are those are scary issues and people who dismiss colleges as woke and elitist on I'm not going to wade into that debate, but we need somebody to go. And we need somebody to come out of those colleges with the skills to to fill jobs that are already, we already have shortages in so many of these areas U and that's that's an issue I think we all need to be paying attention to over time Absolutely. John, thank you so much for joining me My pleasure, thank you very much for having me That was my conversation with John Marcus, senior higher Eeducation reporter at the Heckinger Report Before we go American politics is serious, okay It's about a chronically algae filled, no longer reflecting pool It's about celebrating the country's two hundred fiftet birthday in the Octagon But simply, it's no laughing matter. Nevertheless, love it or Lave it drops every Wednesday and Friday. Each episode, John Lovittt is joined on stage by guests to break down the biggest stories in American politics with jokes Analysis and catharsis, but mostly jokes Upcoming guests include Margaret Cho, Representative Maxwell Frost, and Brooklyn nine nine', Joe Lutruio That's all for today If you like the show, make sure you subscribe, leave a review, contemplate how much money the president of the United States took in from his crypto businesses last year, and tell your friends to listen And if you're under reading. And not just about how, according to a federal filing released Tuesday, Trump took in nearly one point two billion dollars from his crypto businesses, locking in profits while his investors were socked with losses Like me What aay is also a nightly newsletter. Check it out and subscribe at ckie dot com slash subscribe I'm Jane Caston And two quick things First, on yesterday's episode, I mixed up Justice Samuel Alito with the late Justice Anton Scalia when discussing dissents in the birthright citizenship case Which is very embarrassing given that Justice Scalia passed away in twenty sixteen I regret the air. A second