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Who Is Obama’s ‘Middle-Class College Student’?

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Also today on the future of higher ed: Josh Boldt discusses what it'll take to reenergize the Ph.D.

In his recent State of the Union address, President Obama announced his intent to make college affordable. “We're shaking up our system of higher education to give parents more information and colleges more incentives to offer better value, so that no middle-class kid is priced out of a college education,” he proclaimed.

The day before his speech, the Pew Research Center released the results of a new survey on inequality that revealed a change in how Americans define their class identification. In 2008, 25 percent of Americans self-identified as “lower-class.” By 2014, that number had risen to 40 percent, while the number of self-identified “middle-class” Americans fell from 53 to 44 percent.

American class identification has long been a loaded concept. As New York Times columnist Paul Krugman notes: “One of the odd things about America has long been the immense range of people who consider themselves middle-class—and are deluding themselves. Low-paid workers who would be considered poor by international standards, say with incomes below half the median, nonetheless considered themselves lower-middle-class; people with incomes four or five times the median considered themselves, at most, upper-middle class.”

The newfound willingness of Americans to identify as lower-class speaks to the desperation of the post-recession jobless recovery. The rhetoric of “waiting out tough times” has been replaced with acknowledgement of a structural shift. For many, the American Dream is not deferred. It is over.

Putting aside the facile nature of Obama’s promise—which he has made every year he has been in office, as tuition costs soared and the standard of living plunged—what does it mean to promise a “middle-class kid” an affordable education in an era of downward mobility?

And what does it mean when higher education, often portrayed as a ticket into the middle class, is now a way out of it, saddling students with insurmountable debt in a time of diminished opportunity?

As the Federal Reserve Bank of New York has reported, student-loan debt is the only form of consumer debt that has grown since the consumer-debt peak in 2008. It now comprises the largest form of personal debt outside of mortgages, and the effects are intergenerational. There is reason to believe that parents of many recent college graduates are taking on the debt of their children. In 2005, Americans 60 and older owed $8 billion in student loans. In 2013, Americans 60 and older owed $43 billion. Borrowers 60 or older are now the fastest-growing age group for student debt. Their numbers have tripled since 2005, and 12.5 percent of their student loans are delinquent.

The effects may be most profound, however, for the generation to come: the children of the 20- and 30-somethings who bear the simultaneous burden of massive debt and high unemployment and underemployment. As a report by The Atlantic notes, 84 percent of 27-year-olds have some college education, with parental wealth playing a significant role in whether a student managed to finish a degree. (Only 34 percent of the students who intended to complete their B.A.’s did so.) Since 2008, 40 percent have spent some time unemployed, with 12.5 percent unemployed for more than a year.

For the Baby Boomer generation, college was an option—one of many paths to gainful employment. Between 1947 and 1974, median wages rose by 95 percent, and it was possible to attain a middle-class standard of living without an advanced degree.

For the generation that followed, college was a credential: necessary not only for jobs requiring particular skills, but for white-collar professions that had not required it in the past.

For the next generation, college may be a bad bet. They are being raised by parents for whom the employment advantages of college either are outweighed by crushing debt, or are negligible given the structural constraints of the broader economy.

Not everyone views it that way: Many young parents still see the value of a degree and want their children to receive a good education. But can they afford it? It seems unlikely given that they may be paying off their own student loans—and struggling with unsteady employment and higher cost of living—well into their children’s adult years. Meanwhile, tuition continues its exponential rise.

By 2020, the average cost of college (an average including both private and public universities) is predicted to be $46,368, a 38-percent increase compared to now. As financial planner Grace Kvantas argues, “Assuming an investment growth rate of 5 percent, one would need to save $22,779.64 per year for seven years to cover the full cost of the education. That amount of savings is unrealistic for many parents.”

There are ways around it—like student loans. But will students want to take out loans after watching their parents cope with the consequences? For many born in the 1970s and 1980s, higher education did not enhance professional possibilities. It limited them, or provided only a slight gain. College was a promise the economy did not keep. Yet the alternative—no degree at all—is its own guarantee of downward mobility when credentialism structures the labor market.

The problem is not only that college is unaffordable for the middle class. It is that the middle class is disappearing. By the time the children of today’s overeducated, underemployed, debt-ridden workers come of age, what “middle-class kids” will be left to enroll?

Image: Alex Wong, Getty Images

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  • Of course college is not "unaffordable" for the middle class. It takes some careful planning and watchful budgeting. Parents and prospective students need to really think about what to study and where to go.

    It's not hard to avoid becoming an "...overeducated, underemployed, debt-ridden worker..." but it does take careful planning.

    Jerry Place
    Jerry Place
  • And part of the disappearing middle class are the contingent faculty who teach at our colleges and universities. Many of us are now members of the working poor.

    Betsy Smith/Adjunct Professor of ESL/Cape Cod Community College

    Betsy Smith
    Betsy Smith
  • I think that the middle class is developed in the US more than in any other countries. Many countries just have poor people and rich people. To my opinion, you can be called a middle class representative in case you have middle size wage and some property like a house and a car. But if we pay attention to reports we’ll see that there are not so many consumers considering themselves a middle class. So when Obama talks about making college affordable for middle class students he must keep in mind those whose parents use loan service for people with bad credit between paychecks. It’s important to understand that there are poor people in the US and they also want their children to go to college.

    Vicky  Jones
    Vicky Jones