Coronavirus bursts the US college education bubble

Rana Foroohar:

But millions in the middle get neither a cheap nor a useful education. Underemployed and debt laden, they were struggling even before coronavirus struck. One study by the think-tank Demos found that the average student debt burden for a married couple with two four-year degrees was $53,000, and resulted over their lifetimes in an overall wealth loss of $208,000.

Economically, young people have been hit especially hard by the crisis as they do much of the low-paid, high-touch service work that has been shut down. Some 11m college students work: almost three-quarters of them for 20 hours or more a week, and 4.4m full time. Yet few are eligible for federal bailout money.

Colleges, however, will get plenty. Many of the top recipients of federal aid are big state universities, such as the University of California, which incurred $558m of coronavirus-related costs in March alone. But a number of rich Ivy League colleges have received aid, too. Harvard, with its $40bn endowment, was given a nearly $9m CARES grant. It is returning the funds, as are many other top private schools, following public pressure.

They are right to do so. Covid-19 has put moral hazard front and centre on the national agenda. The US cannot have taxpayer-funded bailouts that put big rich companies — or colleges — ahead of those who need help more. We need to focus on the most productive use of funds and worry first about helping the most vulnerable individuals and worthy public institutions.