Feasibility Report for Increasing Grant Requirements

Memo

Summary

        This problem report is to inform the board of education of the rise in tuition required to go to college. This report is to make aware the unsustainable pattern in which costs are rising and potential students are unable to attend and current students are crushed with debt they can’t get out from under. We will inform you of the specific costs associated, discuss why the current model is not sustainable and provide several solutions that could be adapted to correct the path we are currently on.

Introduction

What happens when you graduate from high school? Do you get a job and work for years or do you put in the work, go to college, and earn your degree? What are you going to do if you don’t get a scholarship and you don’t qualify for a grant? The price of college has increased so much that it costs around seven to ten thousand dollars a year. Without a college degree, you will most likely end up starting out making minimum wage which is $8.50 an hour. For a full-time employee, who works 40 hours a week, and you calculate out a full year, your annual salary would be sixteen thousand dollars a year. With living expenses subtracted, a person living off of minimum wage could not afford to pay for school on their salary alone. So, you will do what most people do and take out a student loan to pay for your education. If your education costs you seven grand a year and you attend college for four years, without including interest, you will end up owing twenty-eight thousand dollars after you graduate. If you get a starting job with your degree that pays you thirty thousand dollars annually and you subtract the cost of living and it still makes it very difficult to pay back those student loans you signed up for. Barely scraping by and trying to pay to take care of yourself leaves many students with loans they can’t handle. This report is to show that the cost of schooling is becoming too expensive for students to take on and even after you graduate, you still won’t make enough to compensate for the money you have borrowed.

Purpose Statement / Thesis

        In the first section of this report, we addressed the problem of rising tuition, spoke about why and how this is a problem and gave a few examples of what could be done to correct the amount of debt students are carrying. In this section of our report, we will again look at some statistics and see what it costs for the average American to go to school, how much debt they will carry when they graduate, how we market our idea to society as a whole, what could be done with profits being made at schools that are not non-profit, discuss a few solutions more in depth and evaluate which solution has the best chance to achieve the best result.

Cost

[pic 1]        According to (Jamrisko & Kolet, 2014), since 1978, the cost of schooling has risen a staggering 1,225%. When you compare this to the rise in costs for other things that go along with making a life for yourself and your family, you can see just how out of sync it is with no good explanation as to why. If you look at the next item that many people in the United States are struggling with in medical expenses and you see that schooling has risen twice as much, you realize that something needs to be done about this problem. We would debate that medical care, shelter, and food are far more important to someone being able to survive than paying for schooling. Granted, schooling can get you a nicer means of all three of those other items but without those three school really doesn’t much matter. If you’re a family just struggling to make ends meet and pay for those other three, the fact that schooling has increased a whole lot more, makes it hard for many to fathom even attempting going to school. In a country that touts itself as the best and having the brightest, going to school should not be a decision of whether you go to school or whether your family gets to eat tonight, you have a bead to sleep in and you question whether or not you have the money to take you sick child to the doctor.

Current State

        “The average sticker price, with room and board included, for undergraduate students attending a four-year college or university in their home state was $18,943. Out-of-state students at those schools paid, on average, $32,762. At two-year public schools, in-state students paid an average $11,052.” (Press, 2014) These numbers show that the cheapest route to go to school is by going to a two-year public college like that of Macomb Community College and even then you can only achieve an Associate’s Degree and in today’s day and age, a Bachelor’s Degree is replacing the value a Diploma had decades ago.[pic 2] If you don’t earn a four-year degree in the field you are looking to get into, you might as well plan on not having a job or acquiring one that won’t allow you to pay your loans back. Therefore, you are stuck going to a four-year school and if you stay in state you’re looking at almost $20,000 in debt and if you’re lucky enough to go out of state you will have debt of upwards of $40,000. This is not a small chunk of change. In fact, “total student debt stands at $1.2 trillion nationally, with one of every five households carrying outstanding education loans.” (Kingkade, 2013) That is an enormous amount of money and it is about equal with the amount of money the government pays out to welfare recipients annually. According to (Bidwell, 2014), most student loans are setup to be paid back within 10 years but they actually take 21 years to pay off. Say you stayed in state, you had loans equaling $20,000, and it was going to take you 21 years to pay it off; you would realize that you’re going to be paying that money back 3 or 4 times over what your original principal balance was. You add all of this on top of people trying to pay for all of the other costs that come with life and you can see how many students either turn their back on school or end up failing to pay their loans back; either in time or at all which destroys their credit and hinders the very thing they went to school for in the first place. To acquire a better for a better standard of living. This is why the status quo cannot continue on; either a concerted effort needs to be made to reduce the increasing cost in schooling or a substantial financial commitment needs to be made to graduating high school students so they can get educated and make a better life for themselves.