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 March 05, 2015 08:35 GMT

ECONOMY-THE DAY AHEAD

WASHINGTON (AP) -- The Labor Department will report today on the number of people who applied for unemployment benefits last week. The department will also issue its revised report on fourth-quarter productivity. And the Commerce Department will report on U.S. factory orders for January. Also today, Freddie Mac will release average mortgage rates.

The jobs market has been steadily improving in recent months.

And a private survey Wednesday showed that U.S. businesses added more than 200,000 jobs in February for the 13th straight month. It was the latest sign that strong hiring should boost the economy this year.

Payroll processor ADP says companies added 212,000 jobs last month, a solid gain, though down from 250,000 in the previous month. January's figure was revised up from 213,000. The figures come just before tomorrow's government report on the labor market, which economists forecast will show an increase of 240,000 jobs, according to a survey by data provider FactSet. The unemployment rate is expected to fall to 5.6 percent from 5.7 percent.

CHINA-ECONOMY

BEIJING (AP) -- China is setting a lower economic growth target for this year and is promising to open more industries to foreign investors as it tries to make its slowing, state-dominated economy more productive.

In a report to the National People's Congress, Premier Li Keqiang (lee kuh-TYAHNG') says the growth target of about 7 percent, down from last year's 7.5 percent, is in line with efforts to create a "moderately prosperous society." Actual economic growth last year was 7.4 percent, the lowest since 1990.

The ruling Communist Party is in the midst of a marathon effort to guide the world's second-largest economy to slower but more self-sustaining growth based on domestic consumption and services. It is trying to replace a worn-out model driven by trade and investment in construction and heavy industry that has left China's air and water badly polluted.

JOHNSON & JOHNSON-PHARMACYCLICS

Report: J&J close to deal to buy partner Pharmacyclics

UNDATED (AP) -- Health care giant Johnson & Johnson reportedly is close to buying biopharmaceutical company Pharmacyclics, its longtime partner in developing the blood cancer treatment Imbruvica.

London's Financial Times reports "people familiar with the matter" say Johnson & Johnson's anticipated offer would value Pharmacyclics of Sunnyvale, California, above its current $17 billion market capitalization. Those sources said a deal could be announced within days but might unravel.

J&J spokeswoman Amy Meyer declined to comment.

Pharmacyclics shares surged on the rumor, jumping 6.3 percent in regular trading and another 3 percent after hours to $237.48.

Johnson & Johnson, based in New Brunswick, New Jersey, usually makes mid-sized acquisitions worth several billion dollars, but paid $21.3 billion in 2011 for Synthes, a Swiss maker of orthopedic surgical equipment. J&J has annual revenue of $74 billion.

MANDARIN ORIENTAL-DATA BREACH

NEW YORK (AP) -- Upscale hotel chain Mandarin Oriental says it is investigating a potential credit card breach at its hotels.

"Unfortunately incidents of this nature are increasingly becoming an industrywide concern," the company said in an emailed statement. Mandarin Oriental said it is coordinating with credit card agencies and forensic specialists. The company didn't disclose how many hotels were affected nor how many customers reported fraudulent charges on their credit cards.

Mandarin Oriental operates hotels across the world including Paris, Shanghai, Hong Kong, London, New York, Miami, San Francisco, Prague, Boston, Las Vegas, Macau and Barcelona.

The breach was first reported by cybersecurity news website KrebsOnSecurity.

ACTIVISION-VIVENDI

WILMINGTON, Del. (AP) -- A Delaware judge is eyeing approval of a $275 million settlement in a shareholder lawsuit alleging that videogame maker Activision Blizzard was shortchanged in a $6 billion buyback of shares from French media conglomerate Vivendi SA in 2013.

Following a hearing Wednesday, the judge said he viewed the settlement favorably, and that the defendants were providing reasonable value to settle the claims against them.

An attorney for the lead plaintiff told the judge that the $275 million settlement is the largest ever in a derivative suit, in which shareholders sue on behalf of a company.

The lawsuit alleged that Activision executives and directors, working with Vivendi, breached their fiduciary duties by entering into a deal that improperly benefited CEO Bobby Kotick and co-chairman Brian Kelly.

EXXON MOBIL-SETTLEMENT

ELIZABETH, N.J. (AP) -- Democratic lawmakers and environmentalists are criticizing a proposed legal settlement between Republican New Jersey Gov. Chris Christie's administration and Exxon Mobil over oil and chemical contamination.

The state had sought $9 billion in damages. But a person familiar with the matter says the settlement is for about $250 million. The person wasn't authorized to speak before details were released publicly and spoke Wednesday to The Associated Press on the condition of anonymity.

Assembly Speaker Vincent Prieto is planning a public hearing. Senate President Steve Sweeney and Sen. Ray Lesniak have threatened a lawsuit.

A judge found Exxon liable in 2008 for contamination in Bayonne and Linden. But there's been no ruling on damages.

Irving, Texas-based Exxon Mobil Corp. had said damages should be capped at $3 million.

REVEL SALE

CAMDEN, N.J. (AP) -- A bankruptcy court judge says more time is needed to seek higher bids for Atlantic City's former Revel Casino Hotel.

Judge Gloria Burns delayed a decision Wednesday on the proposed $82 million sale of the shuttered gambling hall to Florida developer Glenn Straub.

She did so after Los Angeles developer Izek Shomof expressed interest in buying Revel, but for $2 million less.

Leo Pustilnikov, Shomof's partner, says he's interested in making a formal bid soon.

Burns says she's giving Revel AC and potential bidders time to work out the best possible deal for the shuttered casino.

A new hearing is set for March 12.

Two previous sales of Revel have fallen through.

The $2.4 billion casino closed in September after two years of operation, and never turned a profit.

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