Education costs rising out of range

Updated: Friday, May 30, 2014
Education costs rising out of range story image
KALAMAZOO, Mich. (NEWSCHANNEL 3) - It's the time of year for pomp and circumstance and graduation parties, as young American men and women make the transition from high school to the rest of their lives.

Never before has the cultivation of young minds been more important for the future of our country.

Tonight, in Tom's Corner, Tom Van Howe says if we expect to compete well in the growing arena of global competition, we should be making it easier for young people to continue their education, not harder.

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We've all heard the numbers. And they're sobering.

In math, our kids rank 36th. In science, 28th. And in reading, 24th.

And its not so much that our scores are getting worse--theirs are getting better.

We're stagnating.

A generation ago the United States had the highest number of college graduates in the world.

Today we rank ninth--behind such countries as South Korea, Japan, China, Canada, and India.

This, at a time when how we compete in a global economy is going to be dictating our future. Whether we wish to burden our young people with this or not, the fact is, they are our warriors in an increasingly competitive battle for survival.  It's a war that will never end.

No longer is it whether the son or daughter is being groomed to take over the family grocery store. The day of the mom and pop enterprise is largely over. The game is now being played on a world stage.

And how are we helping?

We urge them to borrow large sums of money from the government--with interest rates of roughly 4 to 7 percent--to be paid back after they graduate from college.

With a smile, a signature, a handshake and a few words of encouragement, we award them a diploma and place them in a ten to twenty year financial bind.

Instead of saddling these young men and women with interest-laden debt, why not make it as appealing as buying a new car: "no money down and zero-percent financing." If auto companies can afford to do it to increase sales, we ought to be able to do it to increase our competitive edge.

Not to suggest free education. Just to suggest we drop the burden of interest. Why in the world should a student graduate with a debt of $50,000 and have to pay $80 or $90-thousand over the next 20 years to get out from under it? How about "pay back what you borrow."

To be sure, the government likes things the way they are. Our federal government takes in as much as $65 billion a year on interest from loans made to college students. Isn't that special?

Here's a snapshot of where we stand: more and more young adults want to further their educations. Applications are up at colleges and universities all across the state.

The trouble is, tuition rates over the past thirty years have risen three times faster than median family incomes.

A new ACT study says the average family income for high school seniors has actually declined 12 percent over the past eight years.

People have less and less to pay more and more.

Massachusetts Senator Elizabeth Warren says graduates are so strangled by student debt that for many it's nearly impossible to buy houses or cars or take part in our economy in any substantial way.

And the exact opposite is what we need.

Just as in the world of healthcare, we have to find a way to get control of the cost. There is no sane reason that healthcare and education should continuously outpace inflation.

And there is no sane reason we shouldn't be affordably equipping our young people with everything they need to compete head-to-head in an increasingly competitive world.

It's a cost we'd benefit from greatly.

And our future depends on it.

In this corner...I'm Tom Van Howe.

Business News

Last Update on September 02, 2014 07:31 GMT

EURO

LONDON (AP) -- The euro has fallen to a near one-year low against the dollar in the wake of soft European economic data and uncertainty over the crisis in Ukraine.

Europe's single currency fell to a low of $1.3119 after a survey Monday showed that the manufacturing sector across the 18-nation eurozone lost momentum in August. The euro hasn't been lower since early September of last year.

The main reason behind the euro's recent weakness has been a growing expectation that the European Central Bank may be considering a monetary stimulus to boost the ailing eurozone economy. In the second quarter, growth in the eurozone ground to a halt.

The crisis in Ukraine has also hobbled the eurozone's economic outlook. Uncertainty over how the conflict will turn out has made businesses hesitant to invest.

EUROPE-ECONOMIC RECOVERY

FRANKFURT, Germany (AP) -- Europe's economic recovery is in danger. Governments are under pressure to save it, but they are also struggling with political obstacles and disagreement among themselves over what to do.

Instead, the region is pinning its hopes -- once again -- on the European Central Bank, which is expected to launch new stimulus measures if the economy gets any worse.

Europe's lack of growth is looming larger and larger, however, and the ECB says it can't save the economy alone.

For more than five years since the eurozone hit turbulence over too much debt in 2009, governments' answer has been to raise taxes and restrain spending. And there's been some progress. Deficits have shrunk, and countries that needed bailout loans are slowly getting their act together.

But second quarter growth was zero, after only four quarters of measly expansion

CHINA-FOREIGN BUSINESS

BEIJING (AP) -- An American business group warns that foreign companies in China feel increasingly targeted for unfair enforcement of anti-monopoly and other laws and says investment might decline if conditions fail to improve.

The American Chamber of Commerce's report adds to mounting complaints about a flurry of investigations of global automakers, technology suppliers and other companies in recent months. Some foreign managers say Chinese authorities appear to be trying to hamper them and shield domestic rivals from competition.

The American Chamber of Commerce in China says almost half of companies responding to a survey "believe that foreign companies are being targeted." It said the risk was increasing that China "will permanently lose its luster as a desirable investment destination."

Uncertainty over regulatory investigations adds to challenges for foreign companies at a time when China's growth is slowing and they face more competition from ambitious local rivals.

OBAMA-ECONOMY

MILWAUKEE (AP) -- President Barack Obama is touting signs of a continuing emergence from the Great Recession, telling people in Milwaukee the nation's business engines, quote, "a revving a little louder."

The president has used a Labor Day address to put on a new push for increasing the federal minimum wage. Thirteen states have acted on their own to raise their minimum wages.

Until now, Obama and his White House aides had been reluctant to draw too much attention to positive economic trends, worried that some might not be real.

But in Milwaukee, he dared to say, in his words, "We're on a streak."

White House still insist that they are not yet declaring full victory over the lingering effects of a recession that officially ended five years ago.

FAST-FOOD PROTESTS

NEW YORK (AP) -- McDonald's, Wendy's and other fast-food restaurants are expected to be targeted with acts of civil disobedience that could lead to arrests Thursday as labor organizers escalate their campaign to unionize the industry's workers.

Kendall Fells, an organizing director for Fast Food Forward, said workers in a couple of dozen cities were trained to peacefully engage in civil disobedience ahead of this week's planned protests.

Fells declined to specify what is in store for the protests in roughly 150 U.S. cities. But workers recently cited sit-ins as an example of tactics they could use to intensify their push.

The "Fight for $15" campaign is being backed by the Service Employees International Union.

The National Restaurant Association called the protests attempts by labor groups "to boost their dwindling membership."

WEALTH GAP-DIET

CHICAGO (AP) -- A new study says Americans' eating habits have improved -- except among the poor.

Those results show a widening wealth gap when it comes to diet. Yet even among wealthier adults, food choices remain far from ideal.

The 12-year study used an index of healthy eating where a perfect score is 110. U.S. adults averaged just 40 points in 1999, and that climbed to 47 points in 2010. Scores for low-income adults were lower than the average and barely budged during the years studied.

Higher scores mean greater intake of heart-healthy foods including vegetables, fruits, whole grains and healthy fats. Low scores mean less of those foods and a greater chance for diet-related illnesses including diabetes, heart problems and obesity.

The study was published Monday in JAMA Internal Medicine.

TOYOTA-US HEADQUARTERS

RALEIGH, N.C. (AP) -- North Carolina business recruiters offered Toyota more than $100 million for the world's largest carmaker to move its North American headquarters to Charlotte rather than a Dallas suburb but still lost out to a Texas offer half that size.

Texas and local officials in the Dallas suburb of Plano offered Toyota less than $50 million.

Both Toyota and North Carolina Commerce Secretary Sharon Decker agree that the company's decision shows incentive money was just one of many considerations the company considered when deciding to move from the Los Angeles area.

North Carolina recruiting documents and emails released last week after a public records request show only about a quarter of the people filling nearly 3,000 jobs were expected to move from Southern California. The pay for those jobs averages $105,000 a year.

REVEL CLOSING

ATLANTIC CITY, N.J. (AP) -- The most spectacular and costly failure in Atlantic City's 36-year history of casino gambling has begun to play out as $2.4 billion Revel Casino Hotel empties its hotel.

The casino is scheduled to close Tuesday.

Revel is shutting down a little over two years after opening with high hopes of revitalizing Atlantic City's struggling gambling market.

But the business has been mired in its second bankruptcy in as many years, Revel has been unable to find anyone willing to buy the property and keep it open as a casino.

Analysts and competitors say Revel was hampered by business decisions including a total smoking ban, the lack of a buffet and daily bus trips to and from the casino, and the lack of a players' database from which to solicit customers.

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