Today will be talking about the rising cost Of tuition. Will argue that “human capital contracts” proposed by Nobel Prize winning economist Milton Friedman should be adapted by students looking for funding in order to deal with this rising cost. E. Preview In my speech, will address the needs, cause and a solution to this problem. In general, the price of tuition and student debt amount has increased and there is a decline in financial aid from the government and universities. This is caused by inflation and expenditure.
My proposed solution is human capital contracts, a better alternative of a loan, which I will elaborate more about eater.Transition: This rising of college cost issue has caused problem to this county and we have today, sobering evidence that the higher education bubble is headed for a burst. Need: Introduction: will first talk about the need for implementation of my proposed policy.
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Need: 1. Tuition increase According to the National Center for Education Statistics and the U. S. Department of Education, public university students pay 8% more for tuition than they did in 201 1 Based on their report, in 1 980, the average cost of tuition at a public university was $2,550.In 1 990, it increased to around $5,200.
By 2000, it was almost $8,700. By 2010, the average cost of tuition reached nearly $16,000. 2. Decline of financial aid from universities According to the U. S. Department of education, the public state’s aid for tuition fell by 9%, and the state tuition has risen by a staggering amount that the costs are very similar, or more, to what students are paying at a private college. One example is that in-states undergraduate students receiving financial aid at Penn State pay an average of $21,000 annually.
Whereas at Harvard University, students receiving financial aid pay on average of $12,000. There are a lot of factors that go in that disparity, but there is an example of what we are talking about and the problems are only getting worse. 3. Student debt The amount of student debt in the country has almost tripled since 2004. Yell based on data from the Census Bureau’s current population survey and the U. S. Department of Labor, 53% of all Americans under 25 with a college degree are either unemployed or they are working In a job for which they art over qualified.
This is definitely a bubble worth worrying about. Cause: Now that I have done talking with the need for worrying about rising tuition costs, will go on to talk about the causes. According to a report issued by he Delta Cost Project, a nonprofit based in Washington, D. C. 1 .
Prime cause that the college spends more That could mean paying faculty more, or building more sports arenas, or conducting more research whatever the reason, spending rises and students and families have to pick up the tab in the form of higher tuition or lower financial aid.Transition: Now for solutions. The rising cost of tuition is inevitable because it is based off the inflation rate, and increase in expenditures. Therefore we cannot control it. Plan: My proposed solution is the human capital contracts, which was first reposed by Milton Friedman. Human capital contracts are an innovative financial instrument for financing higher education that can potentially replace or reduce college loan amounts for promising students.Boiled down Human Capital Contracts involve students entering into a contract with a source of funding (usually a foundation or corporation) who will pay their secondary expenses.
The student, in turn, agrees to pay a fixed percentage their income after graduation for a set time. Difference between human capital contract and a loan + Transition The difference between human capita entrants and loans is the variable value of the payments students make during the repayment. In the case of human capital contracts, the loaners AR the investors who are investing in a students future. Ill go on to elaborate more about this difference and pros and cons of this solution. Advantages/ Practicality A. Advantages and Disadvantages. Why do advantages outweigh disadvantages? Counterarguments: 1.
Human capital contracts can be used to fund many socially valuable pursuits, but they are not suitable to fund careers that are difficult to justify on economic terms. For example, a student who wants to study international placement and then spend five years working in an African village, would need to find other sources Of financing.Rebuttal: 1 .
But human capital contracts can help: if they open up a more robust private financing channel for courses of education that are likely to provide economic returns for students, it would free up public resources for things that truly depend on public support -? things that society systematically undervalues, like the arts and social entrepreneurship. 2. Unlike a loan, there is also a limited repayment term; students would know exactly when their deal is up. 3. More importantly, student debt would no longer be an issue.
Instead of having to pay a certain amount of money, the student pays a certain percentage of income, always leaving a high percentage of income in their bank accounts. Why pros outweigh cons? The pros do outweigh the cons. The stress of paying off loans for the rest of a student’s life is gone and the student will always have part of his income to spend.
While yes, this may predominantly benefit those pursuing degrees in more profitable and stable fields, it is an opportunity to free up more federal funds for those pursuing other areas of study. Conclusion:A Signal end In closing, although this issue is inevitable, we cannot let it defeat us as students. B Review main point With the drastic increase in tuition and number of students burdened by loan repayments, along with decrease in financial aid, a human capital contract will benefit students by a huge amount as it is based on payments proportional etc potential income of the student, has a limited repayment term and more importantly because it relieves stress on the student’s part. C Reinforce thesis Let’s face it, the cost of college is rising and this is a challenge, especially with the economy and the way it is right now.
