Creating Affordable Opportunities in Higher Education

7/22/2005

Plan for Greater Affordability & Greater Opportunities in Higher Education

Thank you for welcoming me to the Governor’s School today.

It’s a privilege, even if none of you can vote. But you soon will. It’s great to be with such a terrific group of young people.

You know, so much has changed since I was in high school: technology, the culture… and my hairline.

And so much of what is ordinary to you was unimaginable when I was in school, like: the iPod, the internet… Paris Hilton.

Back then, there was no Governor’s School in New Jersey. In fact, the Governor of North Carolina was just starting the first one in 1963.

So I’m especially pleased to get a chance to attend yours, if only for an afternoon.

Let me congratulate you for being selected. Your achievements and your interest set you apart.

You represent the best and brightest in our state. Take a look around: It may be scary to think, but you are looking at the next generation of New Jersey leaders. It’s not scary to me because I know you care – you’re engaged.

And especially look for those geeky kids – because in twenty years, they’re in charge – like Steve Jobs and Bill Gates.

In all seriousness, in your time here, you have been preparing for leadership roles – exploring some of the most complex public policy challenges facing our state. And I am too.

In fact, today, I would like to address one of those challenges, a challenge I believe you have a huge stake in.

That is: how can we make the promise of, the opportunity for higher education more affordable for more New Jersey students and families, while maximizing the benefit to our state’s economy?

During the course of my gubernatorial campaign, I have set out my vision for New Jersey’s future – a vision where New Jersey is not just the wealthiest state, but also far more affordable for all the hardworking people who live here.

That’s why I’m running for governor: to make the changes we need to improve the quality of life for all New Jerseyans. To make accessible the great advantages of our great state.

And that’s why I have proposed an “affordability agenda” – an agenda designed to make it easier to access quality medical care; acquire a home; save for retirement…

And attend and pay for college at home in the Garden State.

To make New Jersey truly affordable, we need to lay the foundation for a strong economy: high paying, high quality jobs in New Jersey

We need to move from an industrial economy to a knowledge- and skills- based one… we need to move from the failed model of tax, borrow, and spend to a strategy of “invest, grow and prosper.”

We must expand industries that will generate economic activity, and provide good paying jobs for the workers of today and tomorrow.

We must invest in the next generation – in you, the people in this room and your peers throughout New Jersey who will make our state and our families productive and prosperous.

We in New Jersey have terrific assets that will help keep us competitive in the 21st Century – from our position as the connecting transportation corridor, to being a biotech capital in the most vibrant region in the world, to our world-class universities and research centers.

But our greatest advantage is that we have the most diverse, best educated, most highly skilled, most ambitious, and most optimistic citizens in the world.

To meet the challenges of the new economy and to make our state more affordable, we must harness their collective talent, drive, and optimism.

We need to:

–nurture the aspirations of our best and brightest – that’s you;

–convince you to study in New Jersey at our great public and private universities;

–encourage you to stay in New Jersey or return after graduation; and

–make the promise of a higher education a reality for more of your parents.

I was fortunate to attend a great public university, the University of Illinois, so I know firsthand how important an affordable, high quality college education can be. It prepared me for a successful business career and the tremendous opportunity I have had to serve the people of New Jersey in the United States Senate.

All for $225 a semester – in 1969 of course.

Nowadays, college students are lucky if that covers a semester’s worth of books for one class.

In the modern economy, workers who stop at high school can expect to earn less than half – maybe one million dollars less than what their college-educated peers earn over a lifetime. That’s the reality.

What you may not realize is just how much New Jersey has riding on the higher education choices you and other high school students make.

College graduates are significantly less likely to be unemployed, underemployed or to require public assistance. Their higher incomes generate far greater revenues for the state and provide the engine for American business. Most importantly, states with large pools of skilled workers can attract the high technology and financial services companies that are important to any thriving economy. And New Jersey must be just that.

The cost of higher education, however, has increased along with its importance. Over the last decade, tuition costs have risen dramatically nationwide. At public universities, they spiked 10.5 percent on average for the 2004-2005 academic year alone.

In high cost states like New Jersey, the situation is tougher. At Rutgers-New Brunswick, undergraduate tuition, fees, room and board cost approximately $16,700 dollars. While that represents a savings over most private schools, that’s nearly 50 percent more than the national average for public universities ($11,354).

As many of you will soon learn: these costs are not abstract concepts, but real financial challenges for students and their families.

To pay for higher education, children and parents twist themselves into financial knots.

Parents take out second mortgages, take on second jobs, and draw down their retirement accounts. In recent years, about 5 percent of the money borrowed through home-equity loans was used to pay for education – putting a severe strain on the resources of middle class families.

More and more full-time students are also working full-time and – despite their best efforts – most end up racking up red ink and I.O.U.s.

They also break their focus and undermine the quality of their academic experience.

Regrettably, when students graduate, they face monthly student loan payments that far outpace their ability to pay. Based on the standards set by the student loan industry, about 40 percent of recent college grads owe more per month than they can reasonably afford.

And it’s getting worse. Adjusted for inflation, recent college grads from public universities owe 85 percent more than recent college grads did just ten years ago. According to a Time Magazine poll, five percent of recent college graduates owe more than 100 thousand dollars in student loans. The bank loan rate among recent grads has skyrocketed.

Facing these enormous costs, many students are discouraged from attending the schools of their choice or even attending college at all. Over the next decade, it is estimated that financial barriers will prevent more than four million qualified high school graduates nationwide from attending a four-year college. Other students downsize their college experience, from four years to two – downsizing from a B.A. to an Associates degree.

Until college loans are repaid, other important priorities – like buying a home, pursuing further education, saving for the future, or even getting married – can be crowded out or postponed.

I believe that our state can do more to help students overcome these financial challenges.

No recent college grad should have to postpone marriage or another important life event because of educational loans.

No family in our state should have to choose between their own financial security and their child’s future.

And no high school student should think her dream of a college education is a luxury she cannot afford.

That’s why I have been so outspoken in the United States Senate about the importance of increasing financial assistance for New Jersey college students.

In 2003, I am proud to have led the successful effort to help more than 80,000 students afford the college of their choice – by fighting a major cut in Pell grants proposed by the Bush Administration.

If I am elected Governor, a central priority of my administration will be to expand access to an outstanding and affordable higher education.

I want to tell you what we’ll do to improve and lower the cost of higher education. Now some of this will be technical. And when I was in high school, “technical,” was just another word for “boring.”

You may even wish you were back in class. But this is important – it’s vital for students and for our whole state.

As Governor, I will push an Affordable Opportunities Initiative – a phased-in $40 million plan to bring down the cost of higher education for our students and improve New Jersey’s economy.

When it is implemented, the Affordable Opportunities Initiative will represent the largest increase in financial aid in New Jersey in a generation.

My Affordable Opportunities Initiative will fully fund tuition assistance grants for all economically disadvantaged students – and it will strengthen the Educational Opportunity Fund, which helps students cover the costs of textbooks, fees, room and board.

My approach will maintain a commitment to the New Jersey STARS program, which offers top high school graduates from New Jersey free tuition at county colleges.

And it will provide vitally needed assistance to the middle class families who often suffer the most under the current financial aid system. It’s another example of the middle class squeeze: middle class families are too wealthy to get need-based tuition assistance, but are not wealthy enough to afford the cost of tuition.

Under my Affordable Opportunities Initiative, 10,000 new tuition assistance grants will be awarded annually – offering support to a broader middle income swath of the New Jersey population. That represents a 17 percent increase over current levels.

But even with extra help, many students are likely to accumulate college debt, which can make choosing certain rewarding career paths difficult. Where starting salaries are low, loan obligations are contributing to historic worker shortages. For example, in 2006, our state is expected to have 18% fewer nurses than necessary to meet our health care needs.

Graduates interested in some of the most demanding and important fields – nursing, teaching, law enforcement – are forced to weigh their financial commitments against their dreams. And too often, dreams give way to the cold economic reality.

To address this challenge, I am proposing two major loan forgiveness programs – “Serve New Jersey” and “Come Home to New Jersey” – for college graduates entering certain critical professions. The first program is directed at graduates of New Jersey colleges, while the second – as the name suggests – attempts to attract New Jerseyans who left the state for college to return home for their careers.

Both proposals build on a program that Governor Codey just started for mental health professionals, and both will forgive up to $5000 in loans – $1000 per year for five years – for workers in areas suffering from severe worker shortages, including nurses, high school math and science teachers, child care providers, and first responders.

These programs will attract the high-quality college graduates our state needs, and they will provide the financial security some New Jersey residents need to follow their dreams.

My Affordable Opportunities Initiative also includes a special $5000 tuition credit to help students whose parents are in the military and serving our country in Afghanistan and Iraq. For many Guard and Reserve families, longer and longer deployments have cut into household incomes substantially – making it tougher to afford tuition for college-bound children. While the Federal government has the G.I. bill, that benefit does not help the dependents left behind.

My approach will address this oversight, and ensure that the children of servicemen and women do not become unintended educational casualties of the war effort.

But as I mentioned before, higher education does not simply benefit the individual; it benefits the state. If we use our educational resources strategically, we can enlist our system of colleges and universities into a broader strategy to grow our economy and make our state more affordable.

Before I was elected to the Senate, I led Goldman Sachs, a company that in 2001 began building a major office complex in Jersey City. And one of the main factors that attracted Goldman Sachs to locate in New Jersey was the highly skilled professionals who would work here and live here already.

The logic is simple: where talent goes, economic activity follows.

That makes enrolling the best and brightest in New Jersey colleges and universities a matter of tremendous economic importance.

Too many of our most talented students choose to leave New Jersey for college. Only 7 percent of New Jersey students with SAT scores above 1300 limit their applications to in-state universities. Ultimately, more than 40 percent of all our students leave for college – double the national average.

Unless we reverse this brain drain, New Jersey will not be able to attract the important industries that will propel our economy in the future.

That’s why I am proposing a major increase in merit-based scholarships to state universities. Based on the state’s successful Outstanding Scholar Recruiting Program, my plan will create one thousand new scholarships geared towards New Jersey’s highest performing high school students.

We also need to make serious investments in our university infrastructure. That’s why I support a top-to-bottom needs assessment to see where major capital projects should proceed, and then I will campaign to pass a voter-approved bond to cover the needed to build the new classrooms, research labs and residents to make us a national leader in public colleges and university.

Finally, my affordability agenda understands the unique role that university research centers can play in developing the key technologies driving the future economy. That’s why I proposed the Edison Innovation Fund, a program that will invest hundreds of millions in New Jersey’s research institutions – from Einstein Alley to Camden’s universities and colleges – to fund critical research, leverage additional private and government investments, and provide New Jersey with partial ownership of valuable patents.

By strengthening the research and development capability of our universities, we will enrich the educational experience for students, retain the very best faculty, advance the cause of science, and place our college graduates and our state at the epicenter of exciting new job-creating industries – fields like nanotechnology, renewable energy, and stem cell research.

While my Affordable Opportunities Initiative is an ambitious, multifaceted effort, much of its cost can be offset by streamlining various university processes – like financial aid – reallocating existing resources, and rooting out corruption and fiscal mismanagement in the higher education system. The recent scandal at UMDNJ – where substantial higher education resources were misdirected – only underlines the importance of ethics reform.

I have called for the establishment of a new independently elected official with the power to oversee spending at every level of government, and eliminate waste, fraud, and abuse – whether in Trenton or at Rutgers.

Let me wrap up:

When I led the investment bank Goldman Sachs, it was rated by its employees as one of the ten best places in American to work.

By implementing my Affordable Opportunities Initiative… by investing in the people and institutions that will pave the way for New Jersey’s future success… and – most importantly – by working together, we can make New Jersey the best place in America to grow up, go to school, live, work, and retire with dignity.

Go forward from the Governor’s School, find your opportunities, and let’s build a great future – together – for New Jersey.

Thank you.