By Robert Pembroke
A new report by the Labor Department detailing education requirements for American workers in 2017 has made my day. For years and years, higher education has been telling us that we need a bachelor’s degree in order to get a well-paying job, but the labor department report paints a different scenario. It says that employers have told the department that only 20 percent of their new hires in 2017 required bachelor’s degrees.
During the 2016-2017 school year, 1.9 million bachelor’s degrees were awarded by colleges and universities in the U.S. Employers were set to hire about 4 million workers in 2017 and only 800,000 were going to need bachelor’s degrees. Most of these jobs went to people who were changing jobs and already had degrees. I have not been able to find out how many of the new hires were recent graduates, but the number has got to be a lot less than 800,000.
A Wall Street Journal article on Dec. 4, titled “Want a New Job?” said, “A hefty 76 percent of jobs require post-employment training,” which means that even if you get a bachelor’s degree, you are going to need a whole bunch of on-the-job training in order to get a job.
On Dec. 2, Congress released a 542-page revamp of the Higher Education Act, which overhauls the student loan program, mandating more transparency on graduates’ earnings and does away with much of the existing framework (regulations) imposed on for-profit colleges.
Another Dec. 2 Wall Street Journal article, “Higher Education Act Proposal Primes Fight Over Future of Colleges,” said that the higher education lobbyists have stocked their campers, loaded their guns and are preparing for an all-out siege on Congress — and here is their pitch: Interest rates for the 6 million student loan borrowers will increase.
I don’t understand how lobbyists can say that interest rates on student loans are going to go up when the newly revised act mandates that colleges and universities start focusing on outcome that shows graduate students what their salaries will be five and 10 years from now. In order to provide college students with this data, all the colleges and universities have to do is survey their past graduates’ occupational earnings.
The act would also limit borrowing though the Grad PLUS program — loans available to students attending graduate school or professional schools — to $28,500, which is well below the cost of attendance for most graduate programs. Barmak Nassirian, director of federal policy for the American Association of State Colleges and University, which represents 400 institutions, said that while allowing unlimited borrowing is problematic, capping loan amounts for particular programs or types of students must be done more strategically. Sounds like another example of Washington swamp talk to me.
It’s 2018 and Americans are burdened with more student debt than ever. According to the latest reports, student debt exceeds $1.45 trillion, whereas credit card debt in 2017 was $784 billion — or approximately half of student loan debt. Student loan delinquency rates are now running at 11.2 percent, the average monthly student loan payment is $371 and the total number of borrowers who have student loans is 40 million. It’s a very big business, folks.
My hat is off to Betsy DeVos, secretary of the Department of Education, who has encouraged a “too big to fail” policy for student loans, has proposed cutting $143 billion from federal student loans, has proposed eliminating the Pell Grant surplus and reducing grant aid, has begun dismantling two consumer protection agencies, has restored realistic collection fees and has implemented year-round Pell Grants.
We small-business owners cannot rely on the feds to properly educate our workers. Instead, we must involve ourselves in America’s education system from kindergarten through college. I have been going up to the University of Utah and talking to everyone who will listen about what our needs are for employees at our companies. I sure could use a little help.
Robert Pembroke is the former chairman and CEO of Pembroke’s Inc. in Salt Lake City and can be reached at pembroke894@gmail.com.