Higher education in the United States is in a state of crisis. On the obvious end of the conundrum is the student debt bubble — which at over $1 trillion in outstanding student loans and with a 90-day delinquency rate of over 11 percent — is showing signs of bursting any day. As reported by Reuters, JPMorgan Chase, in a move reminiscent of the banks’ posturing before the 2007 subprime mortgage collapse, has announced to the colleges that, as of October, it will stop issuing new private student loans. “We just don’t see this as a market that we can significantly grow,” said Thasunda Duckett, Chase’s student loans chief executive, to Reuters.
The less obvious end, however, may be of greater concern. A recent study from the Council of Graduate Schools and the Graduate Records Examination Board showed that while international student enrollment in American graduate programs rose 8 percent to 10 percent of the total graduate population, from Fall 2011 to Fall 2012, domestic students enrollment only rose 0.6 percent over the same period. This is significant because roughly 55 percent of all international students enroll in natural science and engineering graduate programs in the United States, while only 17.3 percent of all American graduate program enrollees do likewise.
Due to increasing international competition and a hostile immigration problem, some fear that America is in the midst of a “brain drain,” in which there are not enough science, technology, engineering and mathematics (STEM)-proficient professionals to meet the current and future demands. According to an analysis from Change the Equation, office and administrative support jobs face four unemployed persons per every job posting, management jobs face 2.2 unemployed persons per every job posting and business and financial jobs face 1.7 per every job posting.
But 1.9 STEM job postings face every STEM-capable unemployed individual. The need is even more acute for healthcare jobs requiring STEM skills: 3.2 job postings are available to every STEM-capable unemployed job seeker.
“Our data corroborate other evidence that STEM skills have been in high demand,” said Change the Equation. “For example, unemployment rates in STEM occupations have been historically low—generally lower than overall rates for workers with a bachelor’s or higher degree. And despite what skeptics claim, STEM workers command higher salaries, and that wage premium is rising, even when education level and other factors are taken into account. STEM workers with less than a bachelor’s degree earn 32 percent more than their non-STEM counterparts, up from 25 percent in 1994. Those with a bachelor’s degree earn 23 percent more, up from 18 percent over the same time period.”
A dry well
A recent study from the Council of Graduate Schools suggest, however, that the nation’s supply of STEM-ready postgraduates may be drying up. The 2013 increase in applications from prospective international students to American graduate schools was just one percent, compared to nine percent in 2012 and 11 percent in 2011. Off all institutions, 48 percent reported a decline in international applications, which was precipitated by a five-year decline in Chinese applications.
“The overall slowed growth in international applications merits serious attention from policymakers as well as universities,” said CGS President Debra W. Stewart. “While the large increases in applications from India and Brazil are encouraging, the decrease in Chinese applicants needs attention. As a country, we simply can’t afford to maintain obstacles to international graduate study, especially as other countries are decreasing these barriers for highly qualified students.”
The reality of this situation is a simple one: as the nation’s immigration system throws up an increasing battery of challenges against foreign doctoral holders from staying in the United States — including a recent call by Colorado and Washington state to institute higher fees on international students — other nations, such as Australia, Canada and the European Union nations are actively recruiting international students and are moving toward removing regulatory barriers. A 2012 bill, which would have made available 55,000 visas for foreign STEM graduate program enrollees, died in the Senate last December after congressional Democrats objected to the exclusion of diversity protections in the program.
China, India and South Korea have all invested significant amount of capital into expanding their own domestic university system. New York University, Michigan State, Carnegie Mellon, Cornell, Georgetown, Northwestern, Texas A&M, George Mason and Bryn Mawr are among the American schools that currently or previously had foreign campuses. An increasingly xenophobic attitude in the United States has made the U.S. unattractive to foreign students, as well.
Intelligence and the American economy
This “brain drain” presents a real problem for the U.S. As reported by Forbes, 25 years ago, the United States was predicted to be in third place globally for gross domestic product, behind Japan and Germany. While the economists who made this prediction were right in predicting economic growth in Germany and Japan, they missed the United States’ growth by a factor of four. What the economists missed was the infusion of intellectual capital in America over the last 25 years — which brought the personal computer drive, the commercialization of the Internet, the miniaturization and personalization of electronics and the onset of small-scale entrepreneurship — and what effect that it would have on the world’s economy.
Of the 1,000 or so key innovators, entrepreneurs and creative geniuses Gallup has listed as being the most influential to America’s economic growth in the last quarter-century, almost 60 percent were foreign-born. In light of a lack of available STEM-capable talent at home and internationally, the United States’ future seems grim. The U.S. Department of Labor estimates that while only 5 percent of the American workforce work in STEM jobs, they are responsible for more than 50 percent of the nation’s economic growth.
Dissenting views
This is a controversial statement, it turns out. According to an Economic Policy Institute paper, “Guestworkers in the High-Skill U.S. Labor Market: Analysis of Supply and Employment Trends of the IT Workforce,” only one of every two U.S. STEM graduates are employed in a STEM job. The report points out that there is actually less of a demand for STEM graduates, reflected by stagnant wages and by a large influx of guest-workers. The report also argues that the true reason Americans are not working STEM jobs is because most STEM jobs pay at a rate unsatisfactory to Americans — for STEM graduates not working in their field of study after one year, the leading rationale given, per the report, is “pay, promotion, working conditions.”
“[If] there was an actual shortage of STEM workers, basic supply and demand would predict that the wages of STEM workers would be on the rise,” interprets the American Prospect. “Instead, wages in STEM fields have not budged in over a decade. Stagnant wages and low rates of STEM job placement strongly suggest we actually have an abundance of STEM-qualified workers.”
Growing the next engineers
This analysis, unfortunately, does not take into light that all STEM graduates do not move into STEM-careers by volition. Most jobs in the United States — from reporters to teachers, health care providers to the military to international finances — require STEM skills, and the incentive to go into research under a system of sequester cuts makes the drive to enter the private sector that much more alluring.
The obvious solution to this problem is to get more Americans to graduate from STEM programs. This may not be as simple as it sounds. “For some time, it seemed like there were sufficient employment opportunities for graduates in a variety of other majors,” wrote Jim Treleaven for TBK blog. “Throughout most of the first decade of this century unemployment was relatively low and most college graduates had little difficulty in finding employment. That, of course, has changed recently but has not driven more students into STEM fields.”
“One obvious problem is the difficulty of these majors. The course material is challenging and requires a significant aptitude in math,” Treleacan continued. “Perhaps more of an issue is the work load these majors demand. A recent study showed that the average engineer devoted twice as much time to their studies as other majors. Fully 40% of entering freshmen who intend on majoring in a STEM field switch majors.”
Once a student is in college, it is too late to develop STEM skills. STEM, like a language, is best learned when a student is immersed in it at a young age. The solution to the nation’s “brain drain” begins, coincidentally enough, is the nation’s K-12 schools. An investment in childhood education toward a promotion of science and mathematics would be a logical first step, if the nation seeks to build a class of future scientists and engineers.
Regardless of if one believes that there is a future drought of STEM-talent looming, the nation must grow serious about its obligations to its children and to the future. The nation can no longer hope for a stopgap solution from abroad; the nation must come up with its own solutions.