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  • College in America: it's four years of all nighters, keg stands, ethnically

  • diverse welcome brochures, Pinterest perfect dorm rooms and crushing

  • student debt.

  • I have $69,812, $47,000, $90,000, $35,000, $350,000,

  • $60,000 worth of student loans. My minimum student loan payment is $1,000

  • a month.

  • It should take me about 10 years to pay that back, I will be roughly 36,

  • 45-years-old, I don't know how old I'll be when I pay that off. I was

  • actually on campus at Penn State and I saw that I had so much to pay and

  • it just was overwhelming. I didn't know how to do it, I never saw a number

  • that big. I just went to school for a few months found out that it was not

  • what I wanted at all, and now I have this forty thousand extra dollars

  • that I have to pay and nothing really to show for it. If I wasn't paying

  • this student debt, oh my God, I would just invest all of my money. It feels

  • like I will have a roommate for the rest of my life because my debt is so

  • much. You can't point at someone and say, this person made your student

  • debt load so much more, it's the whole system. So why is college so

  • expensive, and is it worth it? Higher education today is made up of three

  • main sectors. They all bring in money from tuition but where they get the

  • rest of their revenue varies.

  • Public schools are your state schools like SUNY or Iowa state. They get

  • money from the government. Private for-profit schools like the University

  • of Phoenix or Capella University get money from shareholders. And private

  • non-profits are those like Yale an American University, they get a lot of

  • their money from donors. More on that later. But choosing a college hasn't

  • always been so complicated. In 1636, America's first college was founded.

  • You might have heard of it before, Harvard University

  • For hundreds of years college in America was a pretty exclusive club to get

  • into. But we've come a long way from Harvard's first graduating class of

  • just nine men in 1642. In 2018 more than three million Americans were

  • expected to receive a college degree.

  • The demographics of American higher education have been utterly

  • transformed.

  • In 1944 the G.I. bill was signed into law giving veterans money to attend

  • school.

  • The G.I. Bill of Rights looks after the money end too. That's right.

  • Tuition is taken care of. Funds are provided for laboratory fees, books,

  • supplies and equipment are included.

  • Just a few years later, nearly half of Americans enrolled in college were

  • veterans.

  • You cannot underestimate the G.I. Bill. This educated an entire generation

  • of men and some women too. And it opened the doors people who hadn't even

  • thought that they might go to college. The G.I. Bill changed what American

  • families could aspire to.

  • But not everyone was able to take full advantage of the bill's benefits. It

  • was significantly harder for women and people of color to get the tuition

  • money and enroll in college because of the widespread discrimination by

  • both schools and banks.

  • Dateline Russia 1957.

  • In a moment the story. In the 50s a little beach ball sized satellite

  • launched into space by the Soviet Union had a big impact on the American

  • education system.

  • The first Sputnik. People were worried about this clash between the Soviet

  • Union and the United States. And suddenly it was popular to study science

  • and math. It was patriotic.

  • In the 60s the civil rights movement helped push the doors open even wider

  • to give women and people of color access to higher education. In those

  • years students at University of California schools paid less than a

  • thousand dollars in registration fees. No tuition if you were a resident.

  • But with the 70s came the taxpayer revolt.

  • If you want something you pay for it. Don't expect me to pay for it. It's

  • your problem not mine. And so what happened was the student loan process

  • exploded. And then came the U.S. News and World Report.

  • It was one of the luckiest or most ingenious publishing decisions ever.

  • In 1983 U.S. News and World Report published a list of America's Best

  • Colleges. It became a highly data driven ranking. Every one of the

  • criteria that U.S. News used depended on name recognition, traditional

  • quality, prestige and most of all wealth. Rankings played a big thing for

  • me.

  • I was an athlete and so I was pretty competitive.

  • There have been a ton of new lists since the 1983 ranking but the U.S. News

  • and World Report still reigns king. And colleges keep a pretty close eye

  • on it.

  • If you ask them they will say they pay no attention to it. But within the

  • conference rooms of the admissions office and provost offices across the

  • land, I can assure you they pay very close attention to it.

  • One thing they're paying attention to are their test score averages. By the

  • 90s, colleges started boosting base tuition and using the extra money to

  • give merit based scholarships to kids who tested well. The chief data

  • strategist at U.S. News and World Report downplayed test scores as a major

  • factor in their ranking, saying it's less than eight percent of the

  • methodology today. And that "We've seen schools perform best in the

  • rankings if they emphasize and perform strongly in student outcome areas

  • like graduation and retention rates. He also said they further decrease

  • the weight of SAT and ACT scores. Tuition costs at both public and private

  • colleges have doubled since the late 80s, even when you account for

  • inflation. Even so, more Americans are getting college degrees. But state

  • funding for public universities has taken a hit. States spent less on

  • higher education in 2017 than they did in 2008 before the recession. And

  • that means students are spending more. The tuition they're paying is a big

  • moneymaker for colleges. 2017 was the first year ever that most state

  • schools got more money from tuition than they did from government funding.

  • If you're sitting in the state legislature and you're looking for money,

  • the university system is one of your biggest costs. So when you realize

  • well we cut them 2 percent last year, they didn't go out of business.

  • Let's cut them another 2 percent. What happens is you pass the buck. It

  • goes from the taxpayer to the student.

  • The average student graduates with about $37,000 in student debt

  • altogether. The U.S. has $1.5 trillion dollars of it.

  • I had this mindset that I was gonna go to college undergrad and then I was

  • gonna go to grad school and get my PhD. I thought that I would get through

  • it and then come out on the other side with a job and then be able to pay

  • it off. But that did not go according to plan.

  • Rachel Brandt got her undergraduate degrees in math and economics from Iowa

  • State. Then she moved to New York to pursue her master's in economics.

  • She left grad school after her first semester to better cope with mental

  • health issues she was going through.

  • I thought that I would just withdraw and be fine. But then a couple of

  • weeks after I withdrew, I got an email from the school saying that I owed

  • them $6,000 right away. And that was rough. So I didn't know how I was

  • going to pay that. And that was very stressful.

  • Three, four, five, six,

  • seven different student loans that all have to be paid with different

  • interest rates.

  • The number just keeps going up. I will be paying $867 in rent a month

  • and that's about how much I'm going to have to be paying in loans. I look

  • at my bank account every day and it's very scary.

  • Rachel is far from the only one not to finish a degree she started. Only

  • about 57 percent of undergrads complete their degree within six years. One

  • option students turn to for a more flexible and at times more affordable

  • path to a degree are for-profit colleges like University of Phoenix or

  • DeVry University. The industry has been in flux, but today a little more

  • than 900,000 students attend for-profit colleges in the U.S., many of whom

  • use federal loans to help cover the cost.

  • I feel like I want to do something practical that would that would clearly

  • lead to a specific job. The Art Institute of New York City was suggested

  • to me. Now, I really regret that it was because it turned out to be a

  • terrible financial experience.

  • Despite for-profits being just a small fraction of all colleges in the

  • U.S., for-profit students default on their student debt at a much higher

  • rate.

  • Chyna is a first generation college student from New York who studied web

  • design and interactive media at the Art Institute of New York City when it

  • was run as a for-profit.

  • I withdrew from the school, that was something could have entirely taught

  • myself using tutorials.

  • For-profit schools date all the way back to colonial times. Not everyone

  • could attend institutions like Harvard, so entrepreneurs saw a business

  • opportunity and began teaching reading, writing and trade skills *** for a

  • fee. Benjamin Franklin was a big fan of for-profit schools and the

  • practical skills they offered. In 1994, University of Phoenix's parent

  • company Apollo Education Group went public and laid the groundwork for the

  • for-profit education corporations of today.

  • But this big business approach to education hasn't come without

  • controversy.

  • With so much money on the line many turn to the schools that show the best

  • numbers, the best chances at a new job when you graduate. But can you

  • believe what some of those for profit colleges tell you?

  • When I went there for the so-called tour it was it was basically a sales

  • pitch.

  • That should have been a red flag but it wasn't because I was 18, not having

  • parents who completed college, you know, being a first generation student

  • it's like I didn't have the discernment

  • to just leave those kind of schools alone. The Art Institute did not

  • respond to a request for comment. However the director of Cato's Center

  • for Educational Freedom defended the for-profit system, saying non-profits

  • make a lot of money too. They just distribute it differently. He

  • said traditional colleges often use it to "make the lives of people

  • working in them more comfortable." He also said everyone in higher

  • education is almost certainly seeking profit and there is little evidence

  • that people in for profit schools are less focused on students best

  • interest. Since Chyna left, the Art Institute of New York City along with

  • 43 other Art Institute campuses shut down.

  • There are a number of lawsuits against various campuses. However Chyna's

  • not able to qualify for loan forgiveness because she left the college just

  • before the cutoff date. And she feels trapped. Since she hasn't paid off