Student debt solution doesn’t include $80 million addition to the football stadium

In America, 11.5 percent of student debt was 90 or more days delinquent or in default last quarter. So, what does the University of Utah and the state Legislature do? They issued $80 million in bonds to add 6,000 seats to the university’s football stadium.

The university says it will pay off the bonds in 14 years. At the present time, municipal bonds are paying 4 percent interest, which means you can add another $24 million-plus to the cost of adding those 6,000 seats. No wonder student debt is at an all-time high.

If you want to fix the problem of student debt, you have to understand the problem. Right now, there is only one other developed country that pays more for college than we do and that is Luxembourg. Today, Americans are spending $30,000 a year to go to college. The $30,000 includes all costs, such as tuition, books, fees, housing, food and transportation.

Higher education has been costly for as long as colleges and universities have been around. “Gentlemen have to pay for their sons in one year more than they spent on themselves in the whole four years of their course,” The New York Times lamented in 1875, according to an article in The Atlantic titled “Why Is College in America So Expensive?”

From the same article, we learn that America’s higher education system is made up of four different groups — public colleges, private colleges, nonprofit colleges and for-profit colleges. Public colleges, which include two-year and four-year community colleges, account for three out of four higher education students. These institutions are funded through state and local subsidies along with student fees and some federal aid.

The University of Utah has long relied on out-of-state students, especially foreign attendees, to help pay the freight. But because of the rising cost of tuition, books and fees, I don’t think it will be a given that that strategy can be relied on in the future. Many colleges and universities are seeing a decline in enrollment in both in-state and out-of-state students and raising the cost — as colleges and universities have done for years — will only accelerate the decline.

So, what does a college education get you these days? Not very much. Colleges and universities have been cranking out Ph.D.s with no end in sight. In my opinion, the cost of getting a doctorate cannot be judged on a profit or loss basis. Leaving college with a student debt in the six figures does not compute.

It’s called decadence. “Many U.S. colleges employ armies of fundraisers, athletic staff, lawyers, admissions and financial-aid officers, diversity-and-inclusion managers, building-operation and maintenance staff, security personnel, transportation workers and food-service workers,” The Atlantic article said.

Yes, Americans with college degrees earn 75 percent more than those who only complete high school. Over a lifetime, those with bachelor’s degrees earn more than half a million dollars more than people with no college degree.

“There is no central mechanism to control price increases,” The Atlantic said. Small business should step in and provide that mechanism. The first thing that small business must do is to launch a nationwide advertising campaign to take the stigma out of being a plumber or electrician. The next thing small business must do is start its own trade schools or start an aggressive apprentice system.

In past columns, I have suggested that small business must hire its own doctors and build its own hospitals. The same can be said of higher education. Colleges and universities are not cutting the mustard.

A good friend told of an acquaintance who owned an electrical contracting business. An association to which the contractor belonged offered five scholarships to Salt Lake Community College for prospective employees. According to my friend, the electrical association is having a hard time getting applicants. This is why it’s so essential to take the stigma out of being a tradesman.

Robert Pembroke is the former chairman and CEO of Pembroke’s Inc. in Salt Lake City.