Soaring College Costs Could Spell Trouble For Economic Future

STATE – It’s getting tougher to pay for college, thanks to rising tuition costs and student fees and reductions in state support for higher education.

According to a new report from the Center on Budget and Policy Priorities (CBPP), New Jersey has cut funding for higher education by 27 percent since 2008 when adjusted for inflation, a loss of more than $2,500 per student. During that time, public college tuition has increased 13 percent, adjusted for inflation, more than $1,400 per student. The rising tuition costs come at a time when household incomes are not keeping pace, making access to education less affordable.

That’s not just a problem for college students and families who will soon be sending their children to college. Lack of access to quality higher education threatens New Jersey’s – and the United States’ – future economic prosperity.

“Despite the prevailing mythology that tax rates are the major factor in business location decisions, the evidence is overwhelming that it is the quality of the workforce that is most important,” said New Jersey Policy Perspective president Gordon MacInnes. “Nothing better measures workforce quality than educational levels, which is one of New Jersey’s greatest, but largely ignored, assets.”

According to research from the Hamilton Project at the Brookings Institution, young college graduates earn $12,000 a year more than someone who did not attend college, after adjusting for inflation. More significantly, The Georgetown Center on Education and the Workforce projects that by 2018, 62 percent of all jobs will require at least some college education.

“The benefits of academic attainment extend beyond those who receive a degree; research suggests that the whole community benefits when more residents have college degrees,” the CBPP report says. “Areas with highly educated residents tend to attract strong employers who pay their employees competitive wages.  Those employees, in turn, buy goods and services from others in the community, broadly benefitting the area’s economy.”

The report concludes that states made poor decisions to address revenue shortfall caused by the economic downturn. “Renewing investment in higher education to promote college affordability and quality should be an urgent priority for state policymakers,” it recommends.

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