Authored by: Matt Palumbo
There’s clearly a problem with higher education in America.
Student loan debt tops $1.3 trillion, and for most of those students, they’ve dropped six figures on an extended four-year vacation. The sad truth is that too many people are going to college already. Only 62 percent of college graduates work a job that requires a college degree, and only 27 percent work in a field closely related to their major.
The student loan crisis tends to dominate the higher education debate, and making college tuition free is more popular among the Left than you’d think. Barack Obama unsuccessfully attempted at making Community College free, and free public higher education was part of the Bernie Sanders campaign platform.
Now, more people currently attend college than should, but if we had free college, at least those students wouldn’t have to rack up massive amounts of debt, right?
Don’t blame just tuition for the student loan crisis – blame room and board too.
Sweden is a nation that Bernie says we need to be more like, and offers college completely tuition free to students. Yet, most students carry massive amounts of debt. According to The Atlantic:
The average at the beginning of 2013 was roughly 124,000 Swedish krona ($19,000). The average US student was carrying about 30% more, at $24,800.
While the debt figure was higher in America (where we pay for our own tuition), there’s an even more surprising statistic: 85 percent of Swedish students graduate with debt, compared to only 50% of American students.
Furthermore, “socialized college” is no where near as rewarding as regular college. There was once a time in America where a high school diploma was the equivalent of a college degree today. And now that (nearly) everyone has a high school degree, a college degree is needed to differentiate oneself.
So with that in mind, if everyone had a college degree, then would a degree have as much value as only a high school diploma? Not quite (because some degrees actually do build human capital), but it would diminish the return a degree offers substantially.
In 2017, an American high school graduate earned $712 a week on average, while a college graduate earned $1,173. Thus, there’s a 65% income premium to earning a college degree in America. In Sweden, a college graduate can only expect to earn 25% more than the equivalent of a high school graduate.
In light of that information, it should come to less of a surprise that Swedish graduates have the highest debt-to-income ratios of any group of students in the developed world, despite college being entirely tuition free.
Swedish students are still taking on debt – and the degrees they receive in the end aren’t worth nearly as much.