U.S. Treasury Secretary Jack Lew said that while one of the “clearest ways” to grow the middle class is to increase access to higher education, the cost of an education “has never been greater.”
Lew pointed to research by the Treasury and Department of Education that found children from middle class families who earn a college degree have a 75 percent higher chance of reaching upward income mobility. Individuals with at least a college degree were found to have earned twice as much as individuals without a high school diploma.
Lew also pointed, however, to rising tuition costs as an obstacle to higher education. Over the past 30 years, average tuition at a four-year university has risen by 250 percent, though incomes have only grown by 16 percent over the same time period.
“This means that a lot of young people are missing out on a college education simply because they cannot pay for it,” Lew said in prepared remarks before the Financial Literacy Education Commission. “This is especially true for students from low- and middle-income families. Cost, in fact, is keeping many of those who are in poverty from getting the most effective tool for climbing out of it.”
Lew highlighted several of the Obama Administration’s efforts to make college more affordable, including lowering student loan interest rates, as well as the introduction of initiatives that would create a new university ratings system and cost-cutting measures. He added that President Obama has reached out to universities to encourage them to help students make smarter financial decisions.
“That means giving students—through counseling, web sites, and even the tax filing process—a stronger grasp of their student loan options, their debt obligations, and their personal finances,” Lew said. “We want young people to be better informed so they can manage their expenses, save for the future, and achieve their financial and personal goals.”