Skyrocketing student-loan debt in recent years has left college graduates saddled with huge financial burdens, convinced other students to drop out and scared some young people away from college completely.
So what's the solution?
Researchers in Kansas University's School of Social Welfare have an idea: Instead of saddling students with gobs of money in loans after graduating high school, give them a smaller amount to keep — 18 years earlier.
William Elliott and Terri Friedline, both assistant professors of social welfare at KU, are pushing for something they say would not only open up the option of college for more young people and cut down on loan debt but also spark them to do better in school: government-created savings accounts provided to every child at birth.
As the total student-loan debt in the United States nears $1 trillion, Elliott said, "at some point you've got to quit getting people in debt and start trying to find another solution."
The benefit of the savings plan is primarily psychological rather than financial: it creates a culture of savings and plants the idea that college is a possibility.
"It changes the way you think about college," Elliott said.
The social welfare school's Assets and Education Initiative is devoted to this idea. Elliott has served as its director since arriving at KU in fall 2011, and Friedline has been a faculty associate since joining the school this past fall. Both have cranked out research, before and after their time at KU, on this idea of savings accounts for children and how they could shape their lives in a number of ways.
The savings account concept has caught the eye of the U.S. Department of Education. Last May, it announced an $8.7 million research effort to test the effectiveness of federally funded savings accounts for kids, through its GEAR UP program for low-income students.
Such accounts don't even need to be big to have a big effect. Elliott's research has suggested that children with college-designated savings of at least $1 but less than $500 are more than four times as likely as children with no savings to graduate from college.
Rather than hear only about how much college costs and the potential for scary loan debt, these children grow up thinking positively about the possibility of higher education.
"If you have money for school, you're more likely to think school is possible," Elliott said. "That's not rocket science."
The idea would not need to incur a huge cost. One plan proposed twice in Congress, the ASPIRE Act, would create a $500 savings account for every child at birth, with more contributions and matching funds available for lower-income children. Its total cost would be about $3.25 billion.
Compare that with the federal government's annual expenditures on student loans: somewhere around $65 billion. In theory that number could be reduced because more students would be encouraged to save for college.
One overlooked aspect of the student-debt explosion, Elliott said, is the particular effect it has on low-income and minority children.
"Really what we've seen is that student-loan debt can discourage particularly minority and lower-income children from going to college, because they tend to be loan-averse, some of them," Elliott said.
Even if they do go to college, rising debt makes them more likely not to graduate, he said.
Elliott and Friedline's concept comes from a broader social welfare field concentrating on the possible benefits of assets programs — savings accounts — for low-income people in general. Researcher Michael Sherraden of Washington University in St. Louis has been the primary proponent since the early 1990s.
But KU has been the leader on this idea of extending the concept to children's college savings, they say.
"The policy momentum around extending that to children specifically has just been the last few years," Friedline said.
Politicians on both sides of the aisle tend to find things to like and dislike about the idea, they say. Conservatives like the idea of personal responsibility a savings account encourages, but worry about further redistribution of wealth; liberals support giving a hand up to low-income children, but worry it will draw away from other welfare programs.
Some U.S. cities have started similar programs, and so have some other countries, including the United Kingdom and Singapore.
"We really are behind the eight ball on this one," Elliott said.