TrustNavigator Blog

Just recently I rode 200 miles on my bike in two days to support cancer research in the Cleveland Velosano Ride. Not bad for a grandfather. Two years ago, I spoke to one of the researchers with the Cleveland Clinic where the proceeds for the ride go to the Search for the Cure. When I told him of my family and friends stories as my motivation for the ride he informed me that my Grandfather’s terminal bout with bladder cancer thirty years ago is today mostly curable. In fact, he talked of the progress that is increasing pace. Great news and the results of this and other HealthCare improvements has added a decade to average lifespan over a generation and more to come. Our lifespan growth has only recently been halted by opioid deaths and teen suicides rising at an alarming rate.

Lives cut short by diseases like Cancer, diabetes, Heart disease and Addiction as well as mental health handicaps are serious challenges. Increasingly data is showing these challenges to be affected by behavior and decisions we make in lifestyles, exercise and eating habits. Some can be cured by drugs and treatment, but assuredly a considerable influence is education of better or healthier lifestyles. If most people knew not to eat foods because they could kill you, they wouldn’t eat them. If more individuals were aware of those foods that could give them more energy and healthier daily lives they would respond. In other words, if preventive education and healthcare was more prevalent, we would live longer. Addiction and mental health issues, increasingly affecting our youth, are part of the same solution.

According to Moody’s Investors Services it is estimated that Public Worker retirement programs are $5 trillion underfunded (WSJ 7/31/18). These are retirement promises made by politicians who then don’t save and fund these obligations every year. Kentucky has only 16% of the funds needed to fulfill obligations according to the Public Plans Database and nationwide public pension plans have less than 75% of the funds needed for their promised commitments.

The result of this economic shortfall has left our Federal lifelines for the elderly underfunded, including Social Security and Medicare. These are also trillions of dollars short of promises made to many retired and those planning for retirement. As a country we are woefully undersaving and the dependency on these federal programs will be an increasingly expanding burden on taxpayers and a mounting political issue.

Concurrently at the other end of the spectrum this year student debt will exceed $1.5 trillion. Just 15 years ago this debt was menial. Average debt for college graduates today is over $30,000. According to the College Investor in 2016 the average 35-year-old has a net worth of $20,000 while the average 18-year-old today has a negative net worth of $8800. Never has a society anchored a young generation with this handicap. Only half of 30-year olds earn more than their parents versus 90% in 1970.

The upside down financial paradox is the result of a cultural change valuing the college diploma despite affordability and ROI. Years of inflationary college cost growth has created debt levels outpacing successful outcomes from college education. There is a disconnect of the participation trophy of simply obtaining a degree versus the long-term goals of an education leading to stable and prolonged careers. A recent Pew research Poll reflects an emphasis on degree requirement rather than outcomes of higher education. Employers coincidentally have reflected their attraction to the degree as a pre-requisite screening tool rather than behavioral experience.

The result is we have a coming dilemma that will find our elderly living longer with improved but very costly health care and underfunded in their promised retirement plans as they enter and continue in retirement. Our youth unlike any past generations are not only making less than their parents but are financially unprepared to digest their own debt and savings needs. As they prolong their lives prior to marriage and have children at older ages, their spending will increase later in life hampering their ability to supplement their parent’s healthcare and retirement costs. This convergence is seemingly inevitable if current trends continue.

Like preventive healthcare education, the student debt and preparation issues can be reversed thru education. First, there must be a limit on how much debt students take on. Most students don’t even know their debt levels. Financial aid is incredibly complex for an 18-year-old with virtually no disclosure. A recent series of student polls by TrustNavigator found less than 10% of students could identify more than one of the questions of debt level, interest rates or even to whom their loan was owed. Even less knew their loans were not dischargeable, even in bankruptcy. Who controls loan issuance? College financial aid departments motivated by retention metrics and graduation rates.

The argument for free education is rarely used when balancing priorities of the inevitable challenges to our elderly. Yet the two issues will converge. By politicians focusing on retention, graduation rates and GPA’s as metrics of university success this “backseats” graduates measurable outcomes of happiness and success.

Gallup has found solutions which we will further discuss in our next blog. To quote their own recent survey with Strada- “Gallup has made significant leaps in understanding how six key undergraduate experiences prime graduates to succeed in their work and lives after college. Those "Big Six" Collegiate Experiences include:

  1. I had at least one professor at [college] who made me excited about learning.
  2. My professor(s) at [college] cared about me as a person.
  3. I had a mentor who encouraged me to pursue my goals and dreams.
  4. I worked on a project that took a semester or more to complete.
  5. I had an internship or job that allowed me to apply what I was learning in the classroom.
  6. I was extremely active in extracurricular activities and organizations while I attended [college].

Gallup-Purdue Index

They go on to connect this with the Well Being Index we discussed in our last blog.

"Through our research, we have learned that the top reason students pursue postsecondary education is to get a good job, more than double the second-most common motivation of general interest and a love of learning. Promoting conversations among students and faculty about potential career options may expose students to careers they had not previously considered."

Career-based discussions with students rather than diploma based is a quantum leap in long term thinking. A future of online learning and the cost of college and the ROI is going to change higher education very soon. The debt after college impact on well-being has to change. Colleges will feel it when the recent graduates of the last decade are asked to donate. With looming debt balances they simply will be reluctant to give back. It is a solemn reminder that will affect their willingness to send their children thru a similar process.

Debt in society, underfunded retirement and extended living from improvements in health care are combining to challenge our lifestyles. In our next blog we will discuss the solutions thru education and how we can influence the future of education and healthcare costs and improve outcomes. Stay tuned and listen in to our Podcast "No Turning Back".