How high college tuition and debt cripples America

While the Biden administration has made strides in forgiving $175 billion in student loan debt for 5 million Americans, the Pew Research Center finds there to still be $1.6 trillion in outstanding debt for borrowers. What kind of long-term impacts could college affordability and student debt have on the US economy? Principal Asset Management CEO Kamal Bhatia sits down with Brad Smith on Wealth for a conversation about student debt burdens and investments into human equity. "If a 7% increase in individuals attending higher-ed across the world happened, it could lead to a 10% increase in GDP [gross domestic product] per capita over five years, which is quite amazing because the whole purpose... is about increasing affordability of higher-ed and getting more people to participate in that," Bhatia says, citing Principal's 2024 Global Financial Inclusion Index. "And then what we looked at was, if you do it on a globally population-weighted basis, it would require an 8% reduction in cost for a 7% increase in enrollment. The most interesting thing is... it would only take 1% in US to get to the same outcome, which is quite substantial because US is one of the most expensive places to go to higher-ed."
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