Education Can Help Social Security
If President Bush was serious about strengthening the solvency of Social Security, he would abandon his misguided attempt to privatize it with personal accounts and turn his sights to a major expansion of the Higher Education Act. By increasing the number of college graduates, we would see a significant infusion of resources into the Social Security trust fund over the long term.
Calculations in the College Board’s report, “Education Pays,” indicate that individuals with associate degrees, on average, pay $523 more per year in payroll taxes than those who have earned only a high school diploma. Those with a bachelor’s degree pay $1,463 more, and those with graduate and professional degrees pay double what the average high school graduate pays. According to the National Center for Education Statistics, only 29 percent of young adults ages 25-29 held a bachelor’s degree in 2002.
Imagine the return to the Social Security trust fund if we were to commit to double that percent.
Not only would expanding higher education opportunities improve the long-term finances for Social Security, it would also address our looming work force crisis. There has been a growing chorus of employers from the public and private sectors, warning us that we are not producing the number of teachers, engineers, scientists, health professionals and other skilled workers that are needed. The Bureau of Labor Statistics reports that all but one of the 50 top paying occupations require a college degree or more, and half of the fastest growing occupations require an associate degree or more.
Business as usual in higher education is not an option — we need to operate on a much larger scale. Today, there are many gaps and leaks in the educational pipeline. Only 70 percent of our high school students earn diplomas, the minimum entry requirement for college and careers, and less than one-third of our high school students graduate prepared for success in a four-year college. For Hispanic and black students the graduation rate drops to 50 percent and the college-ready rate drops to less than 20 percent. In 2002, only 18 percent of black young adults had earned a bachelor’s degree, and the figure for Hispanics was even worse, at 8.9 percent.
The challenges do not end with improving college preparation and increasing enrollment. For many low-to-moderate income families, college is becoming financially out of reach.
The Advisory Committee on Student Financial Assistance found that the amount of “unmet need” for low-income families, or what families have to finance after exhausting a grant, loan and work-study aid, was $3,200 per year for public two-year colleges and $3,800 per year for four-year colleges. The effects of this gap between student aid and financial need are devastating to low-income families. In 2003, more than 400,000 college-qualified low-income students did not enroll in a four-year college, and 170,000 did not enroll in any college at all.
Hand in hand with college preparation and degree attainment, there are significant gaps in knowledge about student financial aid. A recent survey conducted by the Tomas Rivera Policy Institute found that more than half of Hispanic parents and 43 percent of young adults could not name a single source of college financial aid. Also, two-thirds of the parents reported not having received any financial aid information before their children left high school.
We know what needs to be done to turn this around. With the reauthorization of the Higher Education Act, we have the opportunity to launch a major expansion of postsecondary education opportunities, putting our nation on a solid economic footing for the future. The key components are already there: student financial aid, outreach programs and institutional capacity building programs. However, instead of looking at the investments we need to make for our future, the Education and the Workforce Committee has been directed to find upwards of $11 billion in savings from higher education programs.
These budget constraints have severely limited our options. We have worked toward simplifying the student aid process. To build institutional capacity on a bipartisan basis, we established a desperately needed graduate program for Hispanic-Serving Institutions. These are positive steps, however, we have done nothing to expand the outreach programs that prepare students and help families plan for college, such as TRIO, GEAR UP and the High School Equivalency Program and College Assistance Migrant Program.
At the same time, American families are receiving mixed messages. On the one hand, they are told that they will have to borrow more at a greater cost to reduce the federal deficit. On the other, they have to contemplate an increase of federal borrowing to finance private accounts for Social Security.
There is still time for a new set of priorities. It is time to save Social Security by reinvigorating our federal investment in higher education.
Rep. Rubén Hinojosa (D-Texas) is the ranking member of the Education and the Workforce subcommittee on select education.