Education Exodus: Students are Fleeing the U.S. for Free Higher Education Abroad

Contributing writer for Wake Up World

“Rising student-loan debt is an economic emergency. Forty million people are dealing with $1.2 trillion in outstanding student debt. It’s stopping young people from buying homes, from buying cars and from starting small businesses. We need to take action.” ~ Senator Elizabeth Warren

There’s a mass migration happening in the U.S. — one where students are moving to greener educational pastures abroad. Take Hunter Newsome. At the last minute, he chose to ditch an opportunity to study at the University of California, Davis and instead headed off to Estonia to earn his bachelors. He saves more than $10K per year in tuition, and will finish his degree in three years instead of four. Chelsea Workman is another student fed up with the cost of education in America. She left Ohio State University in the middle of her sophomore year to complete her degree in Germany — where education is free, even for foreigners. And Germany isn’t unique with its free education system; over 44 countries offer it as well, including Argentina, Denmark, Slovenia, Greece, Kenya, Morocco, Egypt, Uruguay, Scotland and Turkey.

This all begs the question: Why are Americans saddled with such astronomically high student debt when other countries seem to manage without it?

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The Role Colleges and Politicians Play in the Rising Tide of Student Debt

Since 1985, the cost of higher education has surged more that 500 percent in the United States. To put this in perspective, a $10,000 education in 1985 would cost over $50,000 today. And it’s not simply because of inflation. A landmark study in 2015 found that flooding money into higher education by the federal government triggered an increase in tuition and fees — around 65 cents for every dollar of new subsidized loans. In short, colleges and universities that have a large number of average students raise their tuition so they can take advantage of as much of the new federal money as possible. “This means that a significant portion of the $1.3 trillion in student debt can be attributed to tuition inflation pushed along by the flood of student loan money in recent years,” said Chuck DeVore of Forbes.

Additionally, vocational and career training in high school — classes like auto shop, wood shop, metal shop, home economics and business accounting — have significantly declined since the 1980s. Over the course of two decades, parents and politicians alike began to expect every student would go to college — instead of developing vocational skills, where they would be employable straight out of high school. Part of this shift involves advancements in technology. Students can no longer learn on an old junker in auto shop because cars are increasingly sophisticated with computerized elements. Gone are the days of learning to type on hearty manual typewriters as well — computers with expensive hardware and software are the norm now. With this new era of technology, schools cannot keep up with the price tag.

Another aspect that’s influencing rising student debt is the expectation of loan forgiveness. In 2010, President Obama introduced legislation that made new borrowers eligible for student loan forgiveness after 20 years of payment. Due to human nature, if students believe they may not be ultimately held accountable for their debt, they will borrow more.

We can see why student loan debt is off the charts, but where does this leave us as a nation? And some may ask if a completely state funded higher educational system would work in the United States, as it does for other countries. Bernie Sanders promoted the idea of tuition-free public colleges and universities throughout his presidential campaign, believing it would cultivate the best-educated workforce in the world. However, critics are quick to say that the top three most college educated countries (South Korea, Japan and Canada) all charge tuition. Moreover, they point out the dreadful state of our public K-12 school system, in comparison to private schools, where the latter are thriving. We would also have to contend with a much higher tax rate to fund tuition-free colleges. A better option might be to work with the system already in place.

Possible Solutions

One of the main disadvantages of student loans in the U.S. is that the interest rate cannot be refinanced to gain a competitive rate, like with home and business loans. Senator Warren feels we should tackle the current rules about interest on these loans so there’s greater flexibility.

“I’ve proposed that we reduce the interest rate on the outstanding loan debt to the same rate Republicans and Democrats came together last year to set on new loans [3.86 percent]. For millions of borrowers, that would cut interest rates in half or more.”

She also thinks schools should be held accountable if they have a high student loan default rate, where they would have to pay back a portion of the federal student aid given to the university.

We can also look toward countries like Australia, where tuition is based on potential earnings for a particular degree or area of study. Additionally, Australian students only have to repay their loans once they’ve reached an earning threshold (over $39,000). After that point, they pay 4 percent of their yearly income. The payments are also collected automatically with income taxes, thereby reducing the risk of loan default and hefty fines.

A somewhat less glamorous solution involves skipping traditional university altogether and heading for a vocational school at a fraction of the cost. Or how about cobbling together a degree through online classes from some of the world’s best universities like Stanford, MIT, UC Berkeley and Harvard? Coursera, edX and Udacity offer a range of courses for little or no cost.

In the end, it ultimately comes down to us as individuals. We need to think outside the box a bit, question our conditioning about university in general and find creative avenues to avoid the student loan trap altogether.

Article sources:

About the author:

Carolanne Wright enthusiastically believes if we want to see change in the world, we need to be the change. As a nutritionist, natural foods chef and wellness coach, Carolanne has encouraged others to embrace a healthy lifestyle of organic living, gratefulness and joyful orientation for over 13 years.

Through her website Thrive-Living.net, she looks forward to connecting with other like-minded people from around the world who share a similar vision. You can also follow Carolanne on Facebook, Twitter and Pinterest.

Recommended reading by Carolanne Wright:

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The Role Colleges and Politicians Play in the Rising Tide of Student Debt

Possible Solutions

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