Even with a stalled economy and one of the toughest job markets in decades, Education Secretary Arne Duncan is adamant: education is the surest route to a secure future.
“We have to educate our way to a better economy,” Duncan told CNBC in an interview. “Whether it’s a 4-year university, a 2-year college, trade, technical, vocational training, at the end of the day today, there are no good jobs out there if you just have a high-school diploma.”
Secretary Duncan and his boss, President Obama, have made a ‘cradle to career’ education initiative an administration cornerstone, including sweeping reforms in federal college loan programs. In eliminating private lenders from the equation and loaning directly to students, the pool of available funds has increased to $40 billion at no cost to the taxpayers. In addition, an income-based repayment plan is designed to help recent graduates reach secure financial footing.
Duncan indicated that the Obama administration is well aware that some colleges and universities have been more aggressive than others about controlling operating costs to curb sharp tuition increases.
“We’re really trying to shine a spotlight on those places that in tough financial times are holding the line,” he said. “You see some places that have runaway costs. I think that parents and students are going to continue to figure out who’s being thoughtful in tough times and who’s not. And they’ll vote with their feet.”
Education is considered to be the key component in achieving prominence in global competitiveness. Noting that the U.S. once lead the world in producing college graduates, Duncan noted that we have slipped to ninth and that comes at a huge cost to our place in a global economy. So that means increasing enrollment at a whole range of California educational institutions, including for-profit colleges that have recently come under government scrutiny.
“The great for-profits, the good for-profits are absolutely part of the solution,” Duncan said. “They’re helping young people, they’re helping single moms, they’re helping people who have struggled to get back on their feet through education and climb the economic ladder.”
However, Secretary Duncan does acknowledge that some of these institutions may misrepresent their programs, leaving graduates with huge debts and no jobs. Stating that “…we’re going to challenge that status quo very clearly,” Duncan has proposed tying availability of federal student aid to the employment rates of for-profit college graduates.
Many for-profit schools depend on federally funded student loans for their revenue stream and some schools have voiced concerns that these proposed rules may force them to cut back on or eliminate programs. These educators warn that this could have a negative impact on the U.S. goal of achieving world-leadership in providing an educated work force.
With student borrowing at a record high and with increasing student loan defaults, Duncan acknowledges the problems but remains optimistic.
“While I think there’s a lot of hard work ahead of us, I think we’ve made dramatic changes, dramatic improvements to make college more accessible and more affordable,” Duncan said.