Not only is a high-quality education an important asset for individual households, it can be a collective national asset and a force for societal progress that warrants appropriate governmental investment and stewardship. 2 College graduates also experience lower unemployment rates in 2014, college graduates were approximately 40 percent less likely to be unemployed than individuals with only a high school diploma. Over a lifetime, the average college graduate with a four-year degree in 2013 would earn nearly $275,000 more than someone with a high school diploma alone, after netting out the cost of college and foregone wages while in school. To what extent is higher education able to improve the financial standing of households in the lower and middle part of the income distribution? Research shows that an investment in high-quality, complete, and affordable higher education - that is, higher education that delivers access to meaningful employment and creates the conditions for long-term financial stability and well-being - can boost income and, in turn, be a significant asset-building tool for American households. Although the pickup in employment growth since 2013 has improved prospects for households in the lower and middle parts of the income distribution, real median earnings among full-time workers in the second quarter of 2015 were still only about where they were before the recession. Indeed, Boshara shows that although average household incomes have reached pre-recession levels, the recovery from 2008 to 2012 was driven by the highest two income quintiles while the bottom three quintiles saw little or no income growth. Too many Americans continue to lack meaningful employment, and for many, wages are little changed. economy has made progress since the end of the financial crisis, many American households have yet to recover. Many saw their savings decimated, leaving them to start from scratch to rebuild their wealth.Īs Ray Boshara establishes at the outset of this book, although the U.S. 1 Together with unemployment and underemployment, this loss of wealth destroyed many households’ financial standing. According to the most recently available comprehensive data, median family wealth fell another 2 percent from 2010 to 2013. From 2007 to 2010, median family wealth fell 38.8 percent as home prices plunged. The financial crisis depleted the assets of many households. With so much at stake, it is not surprising that around kitchen tables everywhere, Americans are discussing a number of essential and complex questions about higher education: How much should taxpayers spend to support higher education? What factors should student borrowers consider when they take on college and graduate school debt? To what extent can tuition rates be lowered without compromising the ultimate value of higher education? This essay provides the context for these discussions. These higher education outcomes are thus crucial to our nation’s growth and prosperity. As Martha Kanter and Regina Stanback Stroud point out in this volume, members of financially healthy families are better able to take advantage of educational opportunities, and completing an affordable and high-quality higher education program in turn advances the fundamentals of financial health. Higher education is integrally linked to financial health. Financial health allows households to save, build wealth, and access credit, which not only means they can absorb unexpected fluctuations to their day-to-day incomes and spending needs, but also that they can meet longer-term goals such as buying a home or financing a secure retirement. Indeed, as the recovery from the financial crisis made clear, the American economy is only as resilient as the American households that are its bedrock. The financial health of every American household is crucial to achieving inclusive growth and prosperity in our country.
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