What Chile’s Student Protests Can Teach the United States

A high school principal in inner-city Philadelphia, a true reformer and education hero in a sea of urban destitution, had this to report when we both attended the recent SciFoo conference put on by Tim O’Reilly at the Googleplex in Mountain View, California.

One of his star turnaround students, a young African-American woman, had succeeded in realizing her long-held ambition to be accepted by Drexel University’s nursing program. Nursing, as you may know, is one of the more profitable U.S. professions. With salaries for full-time, experienced nurses close to $100,000 a year, that is about double the average U.S. household income.

No wonder the young woman felt exhilarated by the prospect of moving from the working class to the ranks of the upper-middle class. The news for the young woman seemingly got even better: The university had offered her a waiver of 60% of all the fees for tuition and housing.

So why was she sitting in her former principal’s office with tears of desperation in her eyes? With total tuition and fees of $50,000 a year, that still meant she would have to pay $20,000 each and every year in order to complete her four-year program. And she felt there was no way she could take on that financial burden.

Now, you might argue that, in light of her future earnings potential, she did not act wisely in deciding not to pursue the nursing degree. Incurring $80,000 in debt to qualify for a job in which she might make that much every year seems like a rational choice. Of course, there is also the interest burden to consider, which, at an average 8% rate, makes the total cost of the degree much higher still.

What’s wrong with this picture? Americans may not know the alternative, but in other countries, such as those in Europe, such training programs are structured rather differently — and much more advantageously to the young, particularly when it comes to avoiding massive debt burdens.

There, the counterpart to the young woman from Philadelphia would enroll in a three-year apprenticeship program, for which she would actually be paid a monthly stipend to cover her basic living expenses. Now, Europe certainly has its own problems, but this area isn’t one of them.

The relevant question for Americans to ask is this: Why is it that we as a nation rely so heavily on for-profit education, even for jobs that are anything but glamorous and high-paying?

It may be one thing for lawyers, investment bankers and even medical doctors to pay for expensive university training, but for most other professional fields, it is not a wise economic choice.

This becomes especially clear when viewed in an international context — and not the comparison always made in the United States, where the salary prospects of mere high school graduates are compared to those of college graduates. When one compares apples to apples — in this case, college graduates to college graduates — the distinct disadvantage in which young Americans find themselves becomes crystal-clear.

Compared to their counterparts in most other developed nations, from Europe to Asia, they start out with a significant debt burden. And paying back all that debt, at a time of high youth unemployment everywhere, amidst increasingly fierce global competition, is a much more uncertain prospect than in the past.

The significant difference starting out is that education in many countries, but not the United States, is considered almost exclusively a public — and not a private — good. These countries understand that, in order for them to become more productive, they need to have better-qualified young people.

Just where did most other, if not all, countries pick up that wisdom? From the United States. The great period of U.S. leadership, economically, politically and socially, was the postwar period — the era of the GI Bill. It subsidized college educations for many returning soldiers, largely from families without any higher education.

True enough, the United States built an impressive system of public universities. However, in the university sector — hard though this may be to believe — costs have exploded even more than in the ignominious U.S. healthcare sector. According to Moody’s Analytics, the cost of tuition and fees has more than doubled since 2000, outpacing the growth rates of healthcare costs, energy costs and housing costs.

What then, you may wonder, is different from the situation in Chile, where students have taken to the streets to protest the high price of college education in their country? Nothing much in material terms. Too much of the system, there as here, results in the self-replication of elites. And it is characterized by a growing trend toward for-profit education.

Paradoxically, the latter statement is even true for public universities in the United States. The basic business trend there has been to make themselves more attractive to out-of-state students. Why? Because the latter, in a remarkable act of regional discrimination favoring “in-state” Americans, can be charged much higher tuition.

And that rate is becoming ever less distinguishable from the rates charged by private colleges and universities. In the University of California system, for example, out-of-state students are charged an extra $23,000 per year — with total tuition, fees and living expenses totaling over $50,000 annually.

In Chile, the UK, Italy, France, and other developed countries, student protests are clearly on the rise. A disgruntled, pampered elite? Hardly. More like tomorrow’s aspiring middle class.

The interesting fact is that only in the United States is there not such a movement underway. That can hardly be explained the old-fashioned way. According to this view, the level of contentment and the potential for self-advancement is such that — in contrast to these other, socially staid societies — young Americans are too busy and focused on getting ahead to have time to spare for thinking about their social and economic situation.

As the OECD, the global arbiter of such measures, has repeatedly made plain, the United States today is among the advanced countries with the lowest level of social mobility.

That would seem to suggest that the wave of protests would jump over to the United States. Objectively speaking, it probably should. Just don’t hold your breath waiting for it.

That is all the more astounding in light of the fact that the unsustainability of the current system is clear for all to see. Take the words of one experienced, and truth-telling, college administrator. He commented at the Aspen Ideas Festival in June of this year that the way in which the U.S. university system is organized, and the cost trends it has generated, is currently reminiscent of “a bubble economy, but one bordering on outright social insanity.”

Uncharacteristically for the land that has always heralded itself, for a long time with good reason, as the country of action, and not mere talking, it is doing only the latter. Hasn’t the time come for some inter-American learning from the Chileans?