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Montgomery: Higher education pays off (column)

12:22 AM, Oct. 31, 2013  |  Comments
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USA TODAY and other national and local media recently reported that the average increase in college tuition across the nation is the lowest in over 30 years. That is good news for college applicants and their families, and is based on a report released by the College Board, a non-profit that studies trends in education. In fact, across the University of Wisconsin System tuition has been frozen this year.

Another recent report of the College Board, "Education Pays, 2013: The benefits of higher education for individuals and society," makes it clear that investment in higher education has a high payoff for society as a whole, and not just for individuals (tinyurl.com/lnoyptt). Even as annual state funding has been cut by $62 million, reducing even further the taxpayer share of UW costs, the value of a University of Wisconsin degree has never been higher for everyone in many ways.

For individuals, there are well-documented benefits in terms of employment and earnings potential. Students must forego employment earnings while in college and many also accumulate some debt, but financial advantages increase over time after graduation, particularly for those with four-year degrees or higher. This amounts to hundreds of thousands of dollars of income for individuals who work through age 64.

Hard times impact four-year degree holders less. Following the 2008 recession, employment for this group has never been higher, and the difference in employment relative to others has increased. While not all graduates might have found exactly the jobs they desired most, employers of all kinds value not just the technical content of a degree but also the other skills that come along with it, such as problem-solving, writing and communication, collaboration, and so on.

However, these personal gains have benefits for society, too, in the form of higher tax revenues and less dependence on income support programs. In 2011, 26 percent of Wisconsin adults had a four-year college degree - three percentage points lower than the national average, and behind Minnesota's 32 percent. States with more educated citizens generally have higher incomes, and per capita income in Wisconsin trails Minnesota by $5,000. These differences have increased over the past decade. If Wisconsin's per capita income was equal to Minnesota's, residents here would collectively take home $25 billion more in annual earnings.

College graduates, for various reasons, lead healthier lives, which lowers healthcare costs to businesses. College-educated parents, on average, meet their children's needs and improve childhood development and health, leading to lower social costs.

There are other ways in which society's investment pays off. For example, civic benefits, such as higher rates of voting and volunteerism are also associated with higher educational attainment.

There are two important conclusions that arise from these trends.

First, it is clear that the benefits of higher education are not all private gains by any means, yet college education in the United States depends more on private funding and personal debt than in other developed countries. In Wisconsin, in the past decade, private payment for public university education has surpassed state funding and now stands at 60 percent of degree funding. But the documented societal benefits argue for a healthy level of public funding. It ought to be a partnership - a win-win for everyone.

Second, if access to education is not equal to all groups, then economic and social disparities in society are likely to increase over time, particularly in times of economic recession. Inequality not only impacts those who are less well off, it impacts everyone because it exacerbates social problems. Affordable, quality education is one solution to this problem.

Locally, the University of Wisconsin-Marathon County represents an investment by the county as well as the state. Given our low tuition along with the high rate of student success upon transfer, the potential payoff to taxpayers as well as local high school graduates seeking a UW degree is substantial.

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