Free College Education: Demand and Supply Trends in the College Education and Labor Market (Term Paper Sample)

Free College Education: Demand and Supply Trends in the College Education and Labor Market Name Institution Abstract Managing the education expenses in USA is really difficult for the undergraduate students. As the demand for college education is highly inelastic, and students are paying the fees through student loans and part time jobs that increased stress and reduced the college performance as well. Students in college are protesting for free college education. This paper analyzes the demand for education if the government announces free education. There will be significant increase in the demand of college education, whereas, supply will be reduced as colleges may not be able to accommodate such large numbers of students. Moreover, this paper also analyzes the labor market trends with the free education. As numbers of part time workers will quit their jobs, hence, wage rates will be increased. Key words: Free college education, Demand, supply, labor market, student loans Free College Education: Demand and Supply Trends in the College Education and Labor Market Introduction American higher education system is considered as one of the finest higher education systems of the world as USA possess eight out ten top ranked universities of the world (The Economist, 2012). These universities are producing the finest entrepreneurs, IT giants, political leaders, scholars and scientists. The graduates from these universities and colleges are the highest earning individuals of the world. College graduation is necessary for earning but it is difficult for the students to complete college education due to ever increasing college cost and student loans. Moreover, they are also working as part time workers to manage their college education. Cost of college education has increased tremendously during the last two decades. It can be found that cost of four year college education has been increased to six times since 1983. In 1983, the cost of four year college education was $4747 and it has reached $24706 in 2013-2014. Cost of two year college education has also been increased by 4 times since 1983. In 1983-84, the cost of two years college education was $2854 and it has reached to $9888 in 2013-2014. Student loan is also increasing by rapid speed as the current statistics states that student loan is increasing by $2627.27 per second in USA. It is expected that an average monthly student loan payment is about $351. This shows an increasing trend in the college education fees and loans as well. Demand for college education is perfectly inelastic; hence, colleges are increasing the cost of college education that is affecting the education system in USA. As, presidential elections are nearer, so, college students are protesting for free education. This paper discusses that free education will increase the demand for college education and also increases the wage rates. In the course of recent decades an assortment of components mixed to make understudy obligation a just about general American experience. For one, state interest in advanced education dwindled and universities compensated for any shortfall by raising educational cost. In the meantime, monetary guide hasn't stayed aware of educational cost development. In the 1980s, the greatest Pell Grant — the cash the government cash provides for low-pay understudies to go to school — secured more than a large portion of the expense of a four-year state funded school, as indicated by The Institute for College Access and Success, a research organization concentrated on school moderateness (Sanders, 2015). Presently, it covers short of what 33% the expense. A professional education has likewise turned out to be more vital than any other time in recent memory to contend in today's workforce while Americans' wages have stayed stagnant. That implies more understudies are going to class with less cash to pay for it, bringing about an uptick in understudy obligation. The blast in revenue driven school enlistment amid the Great Recession has likewise served to help total levels of understudy obligation and understudy credit defaults. Revenue driven universities have gone under investigation from administrators and customer advocates who blame them for utilizing swelled occupation arrangement and graduation rates to draw understudies into enlisting and tackling advances. College Education and Prevailing Wage Rates As demand for education is inelastic, so, students have to depend upon multiple resources to manage the expenses of college education. Most of the college students are managing their education expenses through student loans and part time jobs. Wage rate is pretty lower for college workers and student loans are also creating troubles for students. Most of the students start the part time work to manage their college education expenses. Numbers of part time workers are increasing in USA with every passing year (Avery, & Turner, 2012). From the statistics, it can be found that 8564000 students were working as part time workers to manage their college education expenses in 2015, however, after that, 2016, number of part time workers has been increased to 8645000. It can also be found that an increase in students' weekly earning is negligible. As from the statistics it can be found that weekly earning of men of age higher than 25 was 291 dollars in 2015, whereas, it has been increased to 292 dollars in 2016 (Bureau of Labor Statistics, 2016). This supports that due to increasing amount of part time workers in the market, wage rates are not increasing substantially. Free Education and its effects College education became the major debate in the US presidential election campaigns. By and large, college training offers some outside advantages to society. Advanced education prompts a more taught and beneficial workforce. Nations with high rates of college training for the most part have larger amounts of development and efficiency development. Along these lines, there is a legitimization for the legislature financing advanced education (Skinner, C. & Panne, 2015). Here is likewise a capable contention that college training ought to be allowed to guarantee uniformity of chance. On the off chance that understudies need to pay for college instruction, this may prevent them. In principle, understudies could take out advances or work low maintenance; however this might be adequate to demoralize understudies from considering and rather may enter the occupation showcase prior. The worldwide economy has constrained nations, for example, the US to have some expertise in higher tech and higher worth included items and administrations. The USA's greatest fare commercial enterprises incorporate pharmaceuticals, natural chemicals, optical and surgical instruments, and atomic innovation. In this way, there is a more prominent requirement for talented graduates who can add to these innovative commercial ventures. Sander supported that college education should be free while negating the Hilary Clinton. The evaluated conveyance of advantages under the Sanders arrangement does not seem, by all accounts, to be exceptionally dynamic, but rather Sanders supporters could make the contention that the advantages that would go to wealthy families are a sensible cost to pay with the expectation of complimentary school for everybody, and may shore up political backing for such a system. They may likewise stress that Sanders has proposed an expansive expense increment focused at higher-pay families, and contend that prosperous families would more than pay for the free school advantages they get through higher duties. Emphasize that this examination is just a beginning stage for considering the potential distributional outcomes of making school free. The most noteworthy impediment of this investigation is that it doesn't consider the reasonable effects on enlistment of wiping out educational cost and expenses. As it were, these anticipated numbers accept that all understudies would at present enlist at the same foundation, and at the same power, when educational cost and charges are dispensed with. As a general rule, enlistment would likely build by and large, despite the fact that it is not clear among which salary bunches it would expand the most. School enlistment among low-pay understudies may rise in respect to different understudies, yet it likewise may fall if rivalry for spots at open universities increments as higher-salary understudies shift from the private to people in general area given the adjustment in cost. The level headed discussion over free school will probably be determined on political than on experimental grounds, however a definitive configuration of recommendations to change how understudies and citizens pay for advanced education ought to painstakingly consider their possible distributional outcomes and the tradeoffs amongst focused and general projects. Free college education is being demanded by students for so many years, but not supplied. If their protests benefited them, then, demand for college education will definitely be increased and it may not be possible to cope with such large demand for colleges. Under the Sanders free school proposition, families from the top portion of the pay dispersion would get 24 percent more in dollar esteem from taking out educational cost than understudies from the lower half of the pay appropriation. The non-educational cost expenses of going to school, including everyday costs, are bigger than the expenses of educational cost and charges for generally understudies. Free school, which does not address these costs, leaves families from the base portion of the...