Those without a college degree find themselves at an even greater risk at being left behind in the post-Great Recession economy.
Households headed by older adults in 2009 averaged 47 times more wealth than households headed by younger adults according to a study released Monday by the Pew Research Center. The wealth gap marks the widest disparity in American history and double the figure in 2005.
The study defined older adults as those 65 and over, and those 35 and under comprised the younger adult households.
Tuition costs, meanwhile, have been rising at a faster rate than other goods or services for nearly thirty years, according to a College Board study. No longer can any student with simply a desire for higher education go to school. They must have the economic means as well.
And that puts students in lower socio-economic classes at a disadvantage.
“College is so expensive for some people it keeps them out,” said Sheldon Danziger, a public policy professor at the University of Michigan specializing in poverty studies. “Yet for other people, they say the package they want leads them to reject the dorm because the dorm doesn’t have a 55 inch flat screen TV in the room.”
Danziger highlighted a problem 40 years in the making. As another gap widens — the disparity between the richest and poorest Americans — colleges have catered to richer applicants who may demand services that end up raising tuition prices.
The widening of the gap strengthens itself. Danziger said that on average, younger Americans are worse off than ever than their older counterparts. Young adults from wealthier backgrounds can still flourish on their own, though.
“There are many young people who have never been better off,” Danziger said. “Particularly if they have a college degree, if that college degree is from an elite university and if they get a degree beyond college. There have probably never been more 20-something millionaires than we have today.”
Those who fail to become millionaires — or those without the income to pay directly for colleges — have to face tough choices regarding college.
On the one hand, these students are likely to fall behind economically if they don’t attend college. However, if they pay their own way, the payment of debt tends to delay milestones that mark successful adulthood such as independence from parents, marriage and home-ownership.
And for others, debt can affect job choices and post-graduate plans.
“I’ll probably be in debt for a while,” said Haley Gatewood, a 21-year old senior at Southern Methodist University. “Right now, grad school is not feasible because of the cost. In regards to my career, I’m basically going to take whatever job I can get so I can start paying off my loans.”
Students who attend elite universities are even more likely to be financially successful, according to Danziger. He likens elite schools to “luxury goods.” Those who can afford it, pay for it. Those who cannot, find other means to get an education.
For many, the answer is community college. Amanda Fineran, a 22-year old senior at Wake Tech Community College in North Carolina, transferred to a community college when she had to start paying her own tuition.
“My loans definitely affect my decision to go back to school to get my Bachelor’s of Science in Nursing and eventually my Masters in Nursing because I don’t want my debt to keep piling up,” Fineran said. “I would like to eventually be able to buy a house and get married and continuing to add onto my loans would make all of that difficult.”
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