The Class of 2012 will proudly walk the stage this weekend. I remember talking with some of these young people when they started college in September 2008, in the midst of a financial crisis. A common refrain I heard during those dark times was, "Thank goodness I'm not graduating this year."
Four years later, many of those same students are graduating into a stagnant economy that is still not creating enough opportunities for them and still threatening to leave much of their remarkable potential untapped. Worse, after years of startling increases in college tuition, they are graduating with unprecedented personal debt burdens. And to top it off, decades of bad policies supported by both political parties have racked up dangerous levels of national debt, leaving the next generation with an unconscionable mess to clean up.
The good news is this: It's not too late to get America back on track, lift the debt, and ensure a brighter future for today's graduates. The budget passed by the House of Representatives in March offers a sensible path forward to expand opportunity for all by advancing real reforms and principled policy solutions.
First, the House-passed budget offers young Americans a plan to boost the economy and provide them with opportunities to succeed. Over half of recent college graduates are either jobless or underemployed. That's unacceptable. We need to foster sustained job creation with reforms that avert higher taxes and remove the shadow of debt that is hanging over would-be employers.
One step we should immediately take is to make the U.S. tax code fair, simple and competitive. Right now, the code fails on all three counts. High tax rates put us at a disadvantage against other nations, businesses with the best lobbyists triumph over those with the best ideas, and economic growth suffers. We can level the playing field and create jobs by lowering tax rates and closing tax loopholes.
Second, the House-passed budget takes steps to tackle tuition inflation. In the last four years, college tuition has risen by nearly 17 percent, or an average of $1,200 per student. The goal of federal financial aid is to make college more affordable, but there is growing evidence that wholesale increases in aid have had the opposite effect. Instead of helping more students achieve their dreams, these increases are simply being absorbed by (and potentially enabling) large tuition increases.
Consequently, student loan debt is on pace to eclipse $1 trillion. This unprecedented level of borrowing, which has surpassed the national level of credit-card debt, is causing young people to graduate with mortgage-sized debt payments, a debilitating hurdle to clear as they seek to start a family, a career, or a business.
The House-passed budget addresses this problem by limiting the growth of open-ended financial-aid subsidies. Instead, we focus aid on low-income students who need help most. Furthermore, we propose to remove regulatory barriers that restrict competition, flexibility and innovation in higher education.
By contrast, the president's approach has proven woefully short-sighted. Instead of addressing the structural causes of tuition inflation, his policies have simply chased ever-higher college costs with ever-higher subsidies, encouraging students to go deeper into personal debt while adding billions more to the national debt. That's an unsustainable plan, for our country and for our students.
We need a fiscal and higher-education strategy that spurs economic growth, tackles tuition inflation, and gets spending and debt under control. The House-passed budget accomplishes all three.
To give America's young people a brighter future, let's advance economic reforms so college students are graduating into a revitalized economy. Let's address the root causes of tuition inflation by promoting innovation and competition, and by refocusing aid so it's no longer just chasing higher costs.
Finally, let's tackle our national debt so we can keep the fundamental American promise: leaving the next generation with a stronger nation than the one our parents left us.
Ryan, R-Janesville, represents Wisconsin's 1st Congressional District. He is chairman of the House Budget Committee.