On January 8, President Obama announced a proposal to make the first two years of community college “free for everybody who is willing to work for it,” with states providing a quarter of the funding and the remaining cost covered by the federal government. The announcement captured the nation’s attention; at the time of writing this, #FreeCommunityCollege was trending as a top conversation on Twitter $TWTR.
The White House confirmed that if all states participate in the program, approximately nine million students are likely to benefit each year, with each student saving an average of $3,800 in tuition fees annually. But as impressive as that figure is, this proposal is about much more than saving nine million college students a couple of thousands of dollars. Aside from helping to ease the heavy burden of student debt that’s gripping our nation, this program has the potential to be one of the most positive and powerful steps in narrowing the ever-growing skills gap in America. Right now, over 9.1 million Americans are unemployed with millions of others underemployed. Yet at the same time, 4.8 million jobs remain unfilled, because there simply isn’t a big enough pool of applicants who possess the right practical, technical, and job-ready skills to do the work companies need.
Free community college could change all that.
While not all the details are yet clear, they so far indicate that participating colleges would have to meet certain academic requirements, with preference given to degrees in high-demand fields. And this is what gets at the heart of the promise to close America’s skills gap, ensuring that the millions of students who receive this government assistance will be trained and educated in the skills that add the most value—and will be the most valued—by 21st-century companies. And by this I mean skills that equip them for the jobs of tomorrow; jobs in lucrative and rapidly expanding fields like information technology, computer science, robotics, health care, and advanced manufacturing. And they’ll get to do it at little or no cost.
If widely implemented, not only will this ambitious free community college program expand educational and employment opportunities across the US, it could be the essential ingredient needed to ensure a more prosperous economic future for years to come.
Here’s why:
Globalization and computer-driven automation are squeezing more and more lower-skill jobs out of the US economy, and things are likely to get tougher in the years ahead. An occupation-oriented associate degree, the type of degree earned at a community or technical college, will enable the next generation of Americans to acquire the knowledge and the skills companies need to stay competitive in our global economy, while at the same time reducing levels of unemployment, particularly the number of jobs lost to off-shoring and outsourcing.
Total US student loan debt has reached a record $1.2 trillion dollars, crippling students, parents and the economy at large. In fact, student loan debt accounts for 6% of America’s overall national debt, a higher percentage than credit card debt and second only to mortgage-related debts. The average 4-year college graduate leaving school saddled with $30,000 in debt, a number that has doubled over the past decade.
And not only are tens of millions of people currently saddled with mountains of outstanding student debt, default rates are at an all-time high; indeed, according to the most recent numbers, one in 10 borrowers default on their loans within the first two years of repayment. Worse yet, it’s not just the graduating students who are faced with massive debt, but in many cases parents are also taking—and in many cases defaulting on loans—in a well-meaning effort to support their children’s futures.
And the cost of education is skyrocketing: The accumulated cost of college tuition has soared by over 1,000% since the late 1970s. This college debt bubble, as many economists have called it, will only continue to inflate. That is, unless we come up with some ways—like Obama’s recent proposal—to incentivize students to pursue a free community college education instead of racking up mountains of debt at a 4-year university or college.
If you look at the US secondary education system in comparison to the rest of the world, one factor becomes apparent: most economically healthy nations place far more emphasis on vocational education than America. Switzerland, for example, has very low unemployment, particularly among its youth – around 3%, in fact – and a highly trained workforce. This is also true of other northern and central European countries, where vocational education is part of the mainstream education system.
In these countries, vocational education plays an important role in assisting high school students make the transition from high school to the world of work. In Austria, Denmark, Finland, Germany, the Netherlands, Norway, and Switzerland, after grade 10, between 40 and 70% of high school students opt for vocational education, which combines both classroom and on-the-job learning over three years. On completion, the students are equipped with a qualification that carries real weight in the labor market, reducing unemployment and under-employment levels of young graduates, and also providing a pathway into even higher levels of education and earnings.
Community college educations do not tend to confer the same level of status as a four-year degree on a graduate. But, you can’t take status to the bank, as many liberal arts grads from highly touted institutions will be quick to tell you. In fact, many associate degree holders enjoy better employment and earning prospects than their collegiate counterparts, and one-third of them start at higher pay levels. Holders of occupational associate degrees also command a wage premium over peers who have earned associate degrees in non-occupational fields: on average $9,000 more per year. And if the associate degree is in a high-demand field such as health care, he or she can earn an average annual earning premium of almost $20,000. And of course, higher earning potential results in a number of “trickle up” benefits for the US economy, like more people with more money to spend on goods and services.
An associate degree is not a terminal award. Many holders go on to earn baccalaureate and graduate degrees—and still higher salaries—especially after a few years working and gaining experience in their respective fields. Twenty-seven percent of US baccalaureate degree-holders in recent years, in fact, have come up through the community college system, and many of them go on to earn high level jobs a variety of lucrative fields.
Many people think that community college leads straight to middle-skills jobs that are menial and low-paying, with no opportunities for advancement. This couldn’t be farther from the truth.
The reality is that today, there are a bevy of respectable, well-compensated, upwardly mobile careers that don’t require a traditional four-year education; and they found not just in expected places like the world of manufacturing but in a variety of fascinating and prestigious fields like sales/marketing, architecture, culinary arts, and other creative fields.
Yet despite this fact, vocational study has a history of being seen as less respectable than attending university. But with unemployment and underemployment rates of college graduates at such high levels in the US, it’s time for this perception to change. It’s time to spread the word that skills training, perhaps now more than ever, is possibly the most reliable pathway to an interesting and rewarding career.
So while some may ask “why should my taxes be funding handouts,” the answer is simple. As long as we have a skills gap—as long as we have people without jobs and jobs without people—the economy will not be able to reach its full potential. Free community college for all is the first step in bridging this gap and giving each one of us a shot at a brighter and better future.
