Four years into the great recession, Americans are still cutting back. Mortgages, credit cards, car loans and other borrowing have fallen sharply since 2008. However, there is one segment of the lending industry that’s still mushrooming: Student loans.
Over the last three and a half years, student loan debt has increased by an incredible $293 billion, and will soon surpass $1 trillion, according to the Federal Reserve Bank of New York. It’s hard to wrap your head around numbers that big, but in February, Standard & Poor’s warned that our spiraling student debt could lead to the next economic crisis.
Universal access to higher education sounds like an empty promise when the average student borrows $25,000 toward a degree, and when so many leave college deeply in debt but without a degree.
It’s time for a different conversation about making college affordable.
Yesterday, my boss, Bill Gates, spoke to higher education leaders gathered to celebrate the 150th anniversary of the Morrill Act—the law that created our nation’s system of public higher education. He urged those leaders to crack this affordability puzzle, to explore how to increase the number of graduates while decreasing costs. He called this the Holy Grail of higher education. Thankfully, many college presidents are already hard at work on this problem.
We believe innovation can change the game. The Gates Foundation is working with many colleges to explore how educational technology can help keep costs down while improving graduation rates.
One of our partners, Rio Salado Community College, has developed an incredible information system that pulls in all sorts of data on student activities and can—within the first eight days of a semester—predict with amazing accuracy which students are most likely to drop out. The college can then take that information and reach out to students who need help, keeping them on track to get their degree or credential.
Arizona State University has redesigned its freshman math courses. In place of lectures, students use adaptive computer software to master the basic concepts. This enables professors to work with students in small groups and help them apply concepts and solve complex problems. The results in the first year were stunning: completion rates in freshman math went up 15 percent while costs went down 50 percent.
The field of educational technology is still nascent, and it can’t solve every problem. But the schools that choose to lead in this field will be the first to adjust to the difficult reality they all now face. And they might just discover higher education’s Holy Grail.