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Economy Update: Education and U.S. Competitveness

by Newsteam Staff
July 2, 2012

A graduating student waits for the start of commencement in Cambridge, Massachusetts, June 4, 2009 (Brian Snyder/Courtesy Reuters). A graduating student waits for the start of commencement in Cambridge, Massachusetts, June 4, 2009 (Brian Snyder/Courtesy Reuters).

Last week Congress reached a deal to prevent a hike in student loan rates–which both the President Barack Obama and Republican challenger Mitt Romney support, but education as a whole will likely remain a campaign theme as analysts continue to weigh its major implications for the still-recovering U.S. economy (WSJ) and global competitiveness.

Congress came to an agreement on student loans with days to spare before rates increased after months of urging from the campaign trail by President Barack Obama, easing the financial burden on graduating students entering a weak job market.

Some analysts argue that between the rising costs of college and a public school system that leaves many students ill-equipped for college, higher education should not be the universal economic imperative it has become in the United States. But others point to statistics showing that those with college degrees are far less likely to be unemployed and have considerably higher salaries than people who don’t.

Brian Barry at Bloomberg writes that, with higher income potential tied directly to a person’s education level, Romney should not shy away from discussions of education and issues of income inequality, including emphasizing his little-noted plan to overhaul the government’s approach to aid for retraining workers. “So while Romney works to convince voters that he is the candidate to get the U.S. economy growing again, he should also explain why he’s the one who will help more Americans lift themselves on that rising tide,” Barry says

In the Huffington Post, former governor of West Virginia and current College Board president Gaston Capterson writes that because “the crisis in American education is at the root of every major challenge facing our nation,” the candidates both need to present their plans for reviving the U.S. education system. “Voters want and deserve a clear and thoughtful debate on a challenge that must be fixed if this country is to maintain its leadership in the world,” Capterson says. “Nothing less than the future of our nation is at stake.”

For more on the candidates’ stances, check this issue tracker on The Candidates and the Economy.

Suggested Other Reading:

At CFR’s Renewing America project, Edward Alden looks at the de-prioritization of foreign language instruction in the U.S. education system and how it is ultimately bad for U.S. business and global competitiveness.

A recent paper from the National Bureau of Economic Research says that not only do better-educated societies have better economies, they also boast better, less-corrupt governments, as “educated people are more likely to complain about misconduct by government officials.”

This 2012 CFR Task  Force report looks at U.S. education and finds that underperforming K-12 public schools is critical for strengthening the country’s security and increasing its economic competitiveness.

– Gayle S. Putrich, Contributing Editor

1 Comment

  • Posted by John Mitchell

    In the current period globally education policies are highly charged, everyone provides education for commercial purposes, and therefore students are unable to get proper education due to lack of money.

    But during the election campaign we have been witnessed a positive polices should be passed in the favor of students while preventing the hikes in students loan. Really it is an unfair issue that students are suffered from high hikes on education loans.

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