Young Americans Feel Cash-Strapped

America prides itself on being a nation of unlimited opportunity. Go to school. Go to work. Go to Florida and retire when you're fifty-five. That's the theory, anyway. While European countries rely heavily on taxes to fund social policies that minimize inequality, America has historically looked to education as the great equalizer. I don't know where we're looking now. As more people want to climb the ladder of educational opportunity, we're simultaneously sawing off the rungs.

The vast system of public universities that exists today was the result of purposeful action by the federal government. In 1862, Congress passed the Morrill Act, named for its sponsor, Congressman Justin Morrill of Vermont, which provided federal land to the states to establish public colleges. The goal of these first land-grant colleges -- such as those in Wisconsin, Michigan, Illinois, Indiana, and Minnesota -- was to educate the entire population and produce research to support emerging industries. In 1890, a second Morrill Act provided land to establish the country's first black colleges.

The nation continued to promote higher education throughout the twentieth century, expanding access to college as a way to redress inequality, foster democratic ideals, and spur economic development. The pledge to kick open the doors to college began in earnest with the "GI Bill of Rights." Officially known as the Servicemen's Readjustment Act of 1944, the goal behind the GI Bill was to help millions of returning veterans "readjust" to civilian life and provide them with the education, skills, and money to successfully reintegrate into society and the economy. The GI Bill provided grants to help veterans pay for tuition, books, and health insurance. It also provided a monthly stipend to help college students pay for living expenses. Back in 1948, veterans received a grant of $500 a year -- enough at the time to pay for all but $25 of tuition at Harvard.(9) On top of that, they received a monthly stipend of $50 -- that's $400 in today's dollars. As a point of comparison, in 2003 the average federal grant to students was $2,421, which falls $24,000 short of tuition and fees at Harvard.(10)

The GI Bill was key to building the massive middle class that exists today.(11) The hundreds of thousands of accountants, teachers, scientists, and engineers educated under the GI Bill helped fuel the long economic expansion of the postwar era and as a result changed the social and economic landscape of America. About 8 million veterans took advantage of the GI Bill, and 2.3 million of these attended colleges and universities. By 1960, half of the members of Congress had gone to college on the GI Bill. With the additional benefits of no-down-payment policies and low-interest mortgages, the GI Bill fostered the great exodus to the suburbs and the establishment of a wide middle class that came to symbolize our country's prosperity and the achievement of the American dream. Not a bad payback for a mere $91 billion investment (in today's dollars).

The kids who grew up in this new middle-class security are today's Baby Boomers. Like their fathers (it was mostly men who profited from the GI Bill), Baby Boomers benefited from generous financial aid policies and dirt-cheap tuition at colleges all across the country. But this time around, Baby Boomer women joined the college stampede.

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