College in America: it's four years of all nighters, keg stands, ethnically

diverse welcome brochures, Pinterest perfect dorm rooms and crushing

student debt.

I have $69,812, $47,000, $90,000, $35,000, $350,000,

$60,000 worth of student loans. My minimum student loan payment is $1,000

a month.

It should take me about 10 years to pay that back, I will be roughly 36,

45-years-old, I don't know how old I'll be when I pay that off. I was

actually on campus at Penn State and I saw that I had so much to pay and

it just was overwhelming. I didn't know how to do it, I never saw a number

that big. I just went to school for a few months found out that it was not

what I wanted at all, and now I have this forty thousand extra dollars

that I have to pay and nothing really to show for it. If I wasn't paying

this student debt, oh my God, I would just invest all of my money. It feels

like I will have a roommate for the rest of my life because my debt is so

much. You can't point at someone and say, this person made your student

debt load so much more, it's the whole system. So why is college so

expensive, and is it worth it? Higher education today is made up of three

main sectors. They all bring in money from tuition but where they get the

rest of their revenue varies.

Public schools are your state schools like SUNY or Iowa state. They get

money from the government. Private for-profit schools like the University

of Phoenix or Capella University get money from shareholders. And private

non-profits are those like Yale an American University, they get a lot of

their money from donors. More on that later. But choosing a college hasn't

always been so complicated. In 1636, America's first college was founded.

You might have heard of it before, Harvard University

For hundreds of years college in America was a pretty exclusive club to get

into. But we've come a long way from Harvard's first graduating class of

just nine men in 1642. In 2018 more than three million Americans were

expected to receive a college degree.

The demographics of American higher education have been utterly

transformed.

In 1944 the G.I. bill was signed into law giving veterans money to attend

school.

The G.I. Bill of Rights looks after the money end too. That's right.

Tuition is taken care of. Funds are provided for laboratory fees, books,

supplies and equipment are included.

Just a few years later, nearly half of Americans enrolled in college were

veterans.

You cannot underestimate the G.I. Bill. This educated an entire generation

of men and some women too. And it opened the doors people who hadn't even

thought that they might go to college. The G.I. Bill changed what American

families could aspire to.

But not everyone was able to take full advantage of the bill's benefits. It

was significantly harder for women and people of color to get the tuition

money and enroll in college because of the widespread discrimination by

both schools and banks.

Dateline Russia 1957.

In a moment the story. In the 50s a little beach ball sized satellite

launched into space by the Soviet Union had a big impact on the American

education system.

The first Sputnik. People were worried about this clash between the Soviet

Union and the United States. And suddenly it was popular to study science

and math. It was patriotic.

In the 60s the civil rights movement helped push the doors open even wider

to give women and people of color access to higher education. In those

years students at University of California schools paid less than a

thousand dollars in registration fees. No tuition if you were a resident.

But with the 70s came the taxpayer revolt.

If you want something you pay for it. Don't expect me to pay for it. It's

your problem not mine. And so what happened was the student loan process

exploded. And then came the U.S. News and World Report.

It was one of the luckiest or most ingenious publishing decisions ever.

In 1983 U.S. News and World Report published a list of America's Best

Colleges. It became a highly data driven ranking. Every one of the

criteria that U.S. News used depended on name recognition, traditional

quality, prestige and most of all wealth. Rankings played a big thing for

me.

I was an athlete and so I was pretty competitive.

There have been a ton of new lists since the 1983 ranking but the U.S. News

and World Report still reigns king. And colleges keep a pretty close eye

on it.

If you ask them they will say they pay no attention to it. But within the

conference rooms of the admissions office and provost offices across the

land, I can assure you they pay very close attention to it.

One thing they're paying attention to are their test score averages. By the

90s, colleges started boosting base tuition and using the extra money to

give merit based scholarships to kids who tested well. The chief data

strategist at U.S. News and World Report downplayed test scores as a major

factor in their ranking, saying it's less than eight percent of the

methodology today. And that "We've seen schools perform best in the

rankings if they emphasize and perform strongly in student outcome areas

like graduation and retention rates. He also said they further decrease

the weight of SAT and ACT scores. Tuition costs at both public and private

colleges have doubled since the late 80s, even when you account for

inflation. Even so, more Americans are getting college degrees. But state

funding for public universities has taken a hit. States spent less on

higher education in 2017 than they did in 2008 before the recession. And

that means students are spending more. The tuition they're paying is a big

moneymaker for colleges. 2017 was the first year ever that most state

schools got more money from tuition than they did from government funding.

If you're sitting in the state legislature and you're looking for money,

the university system is one of your biggest costs. So when you realize

well we cut them 2 percent last year, they didn't go out of business.

Let's cut them another 2 percent. What happens is you pass the buck. It

goes from the taxpayer to the student.

The average student graduates with about $37,000 in student debt

altogether. The U.S. has $1.5 trillion dollars of it.

I had this mindset that I was gonna go to college undergrad and then I was

gonna go to grad school and get my PhD. I thought that I would get through

it and then come out on the other side with a job and then be able to pay

it off. But that did not go according to plan.

Rachel Brandt got her undergraduate degrees in math and economics from Iowa

State. Then she moved to New York to pursue her master's in economics.

She left grad school after her first semester to better cope with mental

health issues she was going through.

I thought that I would just withdraw and be fine. But then a couple of

weeks after I withdrew, I got an email from the school saying that I owed

them $6,000 right away. And that was rough. So I didn't know how I was

going to pay that. And that was very stressful.

Three, four, five, six,

seven different student loans that all have to be paid with different

interest rates.

The number just keeps going up. I will be paying $867 in rent a month

and that's about how much I'm going to have to be paying in loans. I look

at my bank account every day and it's very scary.

Rachel is far from the only one not to finish a degree she started. Only

about 57 percent of undergrads complete their degree within six years. One

option students turn to for a more flexible and at times more affordable

path to a degree are for-profit colleges like University of Phoenix or

DeVry University. The industry has been in flux, but today a little more

than 900,000 students attend for-profit colleges in the U.S., many of whom

use federal loans to help cover the cost.

I feel like I want to do something practical that would that would clearly

lead to a specific job. The Art Institute of New York City was suggested

to me. Now, I really regret that it was because it turned out to be a

terrible financial experience.

Despite for-profits being just a small fraction of all colleges in the

U.S., for-profit students default on their student debt at a much higher

rate.

Chyna is a first generation college student from New York who studied web

design and interactive media at the Art Institute of New York City when it

was run as a for-profit.

I withdrew from the school, that was something could have entirely taught

myself using tutorials.

For-profit schools date all the way back to colonial times. Not everyone

could attend institutions like Harvard, so entrepreneurs saw a business

opportunity and began teaching reading, writing and trade skills *** for a

fee. Benjamin Franklin was a big fan of for-profit schools and the

practical skills they offered. In 1994, University of Phoenix's parent

company Apollo Education Group went public and laid the groundwork for the

for-profit education corporations of today.

But this big business approach to education hasn't come without

controversy.

With so much money on the line many turn to the schools that show the best

numbers, the best chances at a new job when you graduate. But can you

believe what some of those for profit colleges tell you?

When I went there for the so-called tour it was it was basically a sales

pitch.

That should have been a red flag but it wasn't because I was 18, not having

parents who completed college, you know, being a first generation student

it's like I didn't have the discernment

to just leave those kind of schools alone. The Art Institute did not

respond to a request for comment. However the director of Cato's Center

for Educational Freedom defended the for-profit system, saying non-profits

make a lot of money too. They just distribute it differently. He

said traditional colleges often use it to "make the lives of people

working in them more comfortable." He also said everyone in higher

education is almost certainly seeking profit and there is little evidence

that people in for profit schools are less focused on students best

interest. Since Chyna left, the Art Institute of New York City along with

43 other Art Institute campuses shut down.

There are a number of lawsuits against various campuses. However Chyna's

not able to qualify for loan forgiveness because she left the college just

before the cutoff date. And she feels trapped. Since she hasn't paid off

her student loans in full, she's not able to get her transcript, which she

needs that to apply to state schools. So for now she's enrolled in another

for-profit school in the hopes of using the degree to apply to a master's

program at a state school.

I feel like all these for-profit schools they prey on people who are

already who come from low income backgrounds. Enter the non-profits.

Amari Lilton is from St. Louis but went to undergrad at a private college

in Chicago. Now she works at an advertising agency in New York City and is

paying off her more than $40,000 in student debt.

You want to have the college dream without the student debt, because you're

just coming into something and you feel like I'm gonna have all this

independence I'll be able to pick my own classes I'll have this freedom

I've never had before. So you want to go to the coolest place you can.

Every college wants to be the best. They want to compete with the next

college. They want to attract the top students. That means they have to

have the best facilities they have to build new buildings.

And remember tuition discounting? While the sticker price of non-profit

colleges are rising, so is the tuition discount rate. The price you see on

a college website is higher than what many students end up actually

paying. You would think that most of the money is going to the cost of

running the school, but nearly half of undergrad tuition at non-profits

goes to help other people pay for their schooling. Amari didn't pay the

full price of tuition at her private college but she's still facing more

debt than she was expecting.

I just cried. Yeah I just cried because I had no clue how I was going to do

it. I dream about it.

It's always on my mind. If I'm like going out to lunch and I'll just say,

oh my God I hope this goes through because I know they just took my money

out. I just hope, I hope. I want to double my payments by the end of this

year so $2,000 a month. My goal is to not go into my 30s with debt. If I

go to Wells Fargo and say like I want a portfolio with all my best

investments help me out, they won't take me seriously because I have $250

in the bank.

So where do we go from here? I've been studying this for a long time and

advocating for reform and this is the hardest type of problem to fix

because

it's structural. It's all of us. It's the whole market.

Jarrett Freeman ran for New York State Senate in 2016 when he was just 26

years old. I declare my candidacy for New York State Senate. And a big

part of his platform was education and student debt.

I was actually on campus and I saw that I had so much to pay and it just

was overwhelming. I didn't know how to do it.

I never saw a number that big. Americans are becoming less convinced that a

college degree is worth it. In 2013, 53 percent of people thought a four

year degree was worth it. In 2017 only 49 percent of people thought so.

I think that it's so ingrained in your head that you have to go to college,

that college is the next step after graduation. I think in hindsight I see

that college is not for everyone.

Overall I feel a little jaded about college being worth it for everyone, or

at least for students directly out of high school.

Knowing what I know now, I would have even taken a few years off before I

went to college. There is this idea that 18-year-olds are supposed to know

what they want in life. And now that I'm turning 25 tomorrow, I still

don't know exactly what's going on.

That mindset could be a problem for the future job market. It's expected

that by 2020, 65 percent of jobs in the U.S. will require people to have

some college education to even be considered. So there are a lot of jobs

that require you to spend some money on school before they'll pay you to

work. In many cases that sum is a lot of money.

Student debt is a national crisis. Unfortunately we don't have bills on the

floor that are actually addressing that.

The reality is there probably isn't just one solution that's going to solve

everything. It will take a lot of different approaches, and different

approaches are being tested across America. One of the proposed solutions

is an income share agreement. Essentially, instead of taking out loans,

students could agree to repay an investor a percentage of their income for

a set amount of years after they graduate. The idea has support from

politicians on both sides of the aisle and some schools are starting to

test it out. In New York City, Governor Cuomo implemented a program that

gives middle-class residents free tuition at select state schools. And

some billionaires like Bill Gates are giving their own money to try and

fix the system. And of course there's the idea to offer free college.

I do not agree with free college. I think that when you give someone

something for free they do not realize the value of it, and that's just my

opinion, and I think that there should be some cost associated with it.

Free college is a great idea. I am fully supportive of free college. The

catch is: who's going to pay the bill?

In other countries taxpayers foot most of the bill. So instead of paying

student loans later in life, you're paying higher taxes. Roughly two dozen

countries across the world provide free or almost free college to its

citizens.

The solution probably won't be that simple in the U.S. But with student

debt rising and the need for a college degree becoming more and more

important, the future of American education depends on figuring this out.