UW–Madison’s Nick Hillman, a professor with the School of Education’s Department of Educational Leadership and Policy Analysis, shared his expertise with Minnesota Public Radio listeners recently, in a segment focused on the Biden administration’s student loan forgiveness plan.
Hillman is an expert in how finance, policy, and geography shape educational opportunities, and is the director of the university’s Student Success Through Applied Research (SSTAR) Lab.
Among other topics, Hillman spoke about why higher education has become so expensive that students need to take out loans in the first place. “Higher education is labor intensive,” Hillman explained. “And just like other extremely labor-intensive professional services — take the medical field and health care, for example — we have the same kind of problems. It’s called Baumol’s Cost Disease, where these professionals need to be paid a prevailing rate or else (they) go into the private sector.”
Hillman added, “The point I’m trying to make is the underlying structure of delivering education is expensive, and whether the federal government, state governments, or individuals are going to pay that is re-negotiated every generation — what’s the appropriate shared responsibility?”
Hillman also pointed out the impact of extreme wealth inequality in terms of race and class in the U.S. “Black families (when) compared to white families oftentimes have far fewer resources to pay for these expenses,” he said, and therefore are more likely to borrow money for college.
While Hiillman said he thought Biden’s loan forgiveness plan has the potential to help reduce this inequality, he added that “the depth and the scope of racial wealth gaps and inequality in the U.S., especially between Black and white families and individuals, is so bad that student loan debt is a maybe a drop in the bucket in terms of making efforts to close those gaps.”
He suggested that we should think about loan forgiveness in a broader sense: “How does it affect life chances? What are the implications of borrowing to pay for college, across the life course?”
“And,” he said, “(we should be) creative about how we finance our education systems, because of those racial disparities are baked into all sorts of elements of our life, long before students have go to college, and long after, when they’re in the labor force.”
To learn more about this critical issue, listen to the full segment at mprnews.org.