Oregon students face economic crisis that will affect us all

Eugene Register-Guard
September 14, 2011By Juan Carlos Ordóñez

Although the start of the college fall semester is imbued with excitement and hope, Oregonians would be remiss to ignore the daunting challenges that confront today’s students and other young adults.

At least four obstacles hamper the ability of young Oregonians to succeed: rising tuition, student debt, diminished job prospects and stagnant wages. Each is a problem, and the combination is a crisis.

Over recent decades, the state of Oregon has disinvested in higher education. That’s evident from the fact that the share of general fund money going to the Oregon University System shriveled from 16.9 percent in 1987-89 to 5.8 percent in 2009-11.

Even as state support has plummeted, OUS’s total budget per student has stayed fairly flat.

How was this trick pulled off? By ratcheting up tuition and fees, which have nearly quadrupled from their 1986-87 level. In other words, as the state has disinvested in higher education, it has foisted greater costs onto the students.

Perhaps not surprisingly, students today carry big debt loads. In 2009, three out of five Oregon college graduates carried student debt. Their average burden was $22,417.

Debt loads also plagued students who left school without completing a degree.

Nationally, the explosion of student debt is so large that it now totals more than all credit card debt. Unlike other forms of consumer debt, however, student debt cannot be discharged through bankruptcy. No matter how desperate their economic circumstances, former students remain shackled to education debt throughout their lifetime.

Burdened with a heavy debt load, many young adults leave school only to find a bleak job market. While state-level data is unavailable, national figures show that the 2010 unemployment rate for workers under age 25 and not in school was 18.4 percent — roughly double the overall unemployment level. Even young workers with a four-year college degree face elevated unemployment levels compared to older workers with a college degree.

And for many young adults who do land jobs, their paychecks are smaller than those of earlier generations of young workers.

Among Oregon workers ages 25-34, only those with a college degree have experienced wage gains since the early 1980s, and those gains amount to only a few hundred dollars for the typical earner.

For other young workers, however, wages have declined. For instance, the typical earnings of young Oregon workers who attended college but didn’t complete a degree are 24 percent less than they were 30 years ago.

The combination of higher educational costs, heavy debt loads, job scarcity and stagnant or declining wages makes it so that the current generation of young Oregonians won’t do as well as their parents.

For a parent, that is a heart-breaking development. For a state and nation, it portends economic trouble.

Lawmakers must act with urgency to remove the obstacles in the economic path of young Oregonians. That includes providing additional public resources for education to control tuition costs, enacting debt relief for heavily burdened students and implementing a robust jobs program.

Failure to act would mean hardship for the current generation of young adults and a precarious future for our state and nation.

Juan Carlos Ordoñez is the Oregon Center for Public Policy’s communications director. The Oregon Center for Public Policy is a nonpartisan research institute that does in-depth research and analysis on budget, tax and economic issues. The center’s goal is to improve decision-making and generate more opportunities for all Oregonians.

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